Regional
A year later, how has Rwanda, region fared under AfCFTA?
Since
the African Continental Free Trade Area (AfCFTA) went in force in January last
year, the East African Community (EAC) stands at 87 per cent of products to be
traded under the agreement.
Under
the AfCFTA agreement, a country or member states of a bloc should have at least 90 per cent tariff offer to be allowed to trade within
the framework on agreed rules of origin.
According
to Antoine Kajangwe, Director General of Trade and Investment in the Ministry
of Trade and Industry, the remaining task is to agree on the remaining three
per cent of products as a bloc.
“The
87 per cent in the grand scheme of things means hundreds of products that
member states are already agreeing to. Given that you are negotiating with 54
countries, it takes some time to ensure that all interests of every member
state are aligned,” he said.
The AfCFTA is a member-driven and consensus-driven institution, meaning that all members have to agree or nothing gets on the paper, he added,
According
to the AfCFTA modalities, 90 per cent tariff offer fall under category A, where
products had to be liberalized in 2021 and progressively reduced over 10 years.
Seven per cent get liberalized over 15 years and three per cent of products are
excluded from tax exemption.
Gains
registered
Prudence
Sebahizi, Chief Technical Advisor at AfCFTA Secretariat, said that over the
past year, there has been progress in establishing institutions, such as the
dispute settlement body, among others to implement the agreement.
In
terms of continental trade done over the past year, Kajangwe said that there
has been growth of diversification in increasing African markets that Rwanda
can take advantage of.
For
instance, in the first eleven months of 2021, Rwandan exports within Africa
amounted to $830 million, representing 56 per cent of total exports. Despite DR
Congo taking 68 per cent of Rwanda’s exports to Africa, the country exported to
30 different African countries.
However,
he said that there is still a huge dependency on imports outside the continent,
where only 36 per cent of Rwandan imports worth $908 million were from African
countries.
Service
commitment is another area that has seen a lot of progress, according to
Kajangwe, it has started face to negotiations with draft protocols being
shared.
“Services
are fundamental aspect for Rwanda as a knowledge-based economy, we are looking
at finance, transport, communication, architecture, things that Rwanda has
developed a really good competitive advantage.”
‘Rwanda
eyes western African markets’
Rwanda
has identified a number of countries where the private sector can easily find
potential in trade and investment, said Kajangwe.
“We
anticipate that the AfCFTA should open up doors to these markets that have huge
purchasing power and that want quality products that Rwanda is starting to gain
a reputation for producing,” he said.
In terms of those products, in line with the National Strategy for Transformation (NST1), he pinpointed Agro-processed products, light manufacturing products and construction products.
“Countries
in Western African that we have not traded with a lot in the past such as Ghana,
Senegal, Nigeria, Chad, Benin, which today, we are starting to see an
improvement and expansion of trade,” he said.
This
is in addition to east and central African countries with which Rwanda has
bilateral agreements such as Central African Republic, Mozambique, DR Congo,
among others.
The
AfCFTA, the largest in the world in terms of participating countries since the
formation of the World Trade Organization, was brokered by the African Union
(AU) and was signed in Kigali, Rwanda on March 21, 2018.
It
covers 54 African countries, 43 of which have already ratified the agreement,
with 39 state parties officially recognized, including Rwanda.
On July 30, 2021, Rwanda initiated a process to domesticate the Economic Community of Central African States (ECCAS) trade tariffs in the country’s trade laws.