Manufacturers cautious with the African free trade area

Andrew Maramwidze - BG reporter
Tuesday, 26 February 2019
Manufacturers cautious with the African free trade area

Botswana Exporters Manufacturers Association has maintained that the recently signed African Continental Free Trade Area (AfCFTA) should not cripple the local industries. Mmantlha Sankoloba, the Association’s Chief Executive Officer said despite the signing of the agreement being viewed as a symbolic step, “there is still a long way to go to realize the finer tenets of the agreement.”

She warned that presently each African country and regional bloc has several trade agreements with various partners, hence it is important to tread with care on the opportunities presented by the platform. “We still have to interrogate the agreement, and advise our membership on how to get the real meat from the bones in this new development.

“Eliminating all tariffs in the free trade could be problematic, but our view is that, as long as the majority of tariffs that affect our members are scrapped, we will see value in the agreement, from an export and manufacturing sector point of view,” Sankoloba emphasized. Though AfCFTA is expected to make it easier for Botswana companies and other African companies to leverage economies of scale in new markets, Sankoloba wants protection of local industries to continue. “Botswana would still have to protect local producers and industries, impose periodic export restrictions in certain products while the implementation of the agreement gains steam,” said Sankoloba.

She further said the Association hopes that the decision to sign into AfCFTA is backed by evidence. “Lest we join just because other countries are joining, without us realizing much benefit from this, given our membership to so many economic blocks,” said Sankoloba.
However, BEMA hopes that the agreement has the potential to impact the local economy positively, including boosting trade, manufacturing and exports, job creation and poverty alleviation, and impact the local Special Economic Zones.

“We think that the types of exports that would gain most are those that are labor intensive, such as manufacturing and exports, which bodes well for our membership,” said Sankoloba.Despite the local economy’s small population, BEMA believes if positively done AfCFTA opens up infinite market access opportunities for the Association’s members and infinite networking opportunities as well as a chance to exploit the continent’s intellectual resource base.

The specific objectives of the AfCFTA, for purposes of fulfilling and realizing the agreement are that signatories shall progressively eliminate tariffs and non-tariff barriers to trade in goods as well as to liberalize trade in services and cooperate on investment, intellectual property rights and competition policy. They also envision to cooperate on all trade-related areas and customs. Botswana becomes the 51st country to sign the AfCFT, governed by variable geometry, flexibility and special and differential treatment, transparency and disclosure of information.

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