Africa Renewal: Now that AfCFTA is in force, do you think countries will fully implement the agreement and within the set timelines?
Vera Songwe: It’s a good thing that some countries are moving a step ahead. It shows how trade is important to African countries and that countries are ready to open their borders. So yes, we are hopeful countries will fully implement the agreement. Countries are realizing they need to trade more with others because of an expected increase in revenues and jobs creation, especially for the youth. Intra-African trade is expected to rise to 53.3%, meaning that revenues will increase.
How can member states ensure that the agreement is fully implemented?
Ministers of finance of member states signing on to AfCFTA have an important role to play to help countries implement the agreement. Tax and customs, for example, which are key components of AfCFTA, are matters under the ministry of finance. It’s up to the finance ministers to evaluate if, how and when revenues will increase for their countries and how these revenues will be expended. Once countries ratify the document, they have 10 years, some have 13 years, to put key policies in place to fully take advantage of AfCFTA.
We expect countries to carry out a review of their macroeconomic policies, focusing on fiscal policies that are fit for purpose, and to help us not only to adapt to, and make the most of, AfCFTA, but more broadly to achieve Agenda 2063 and the 2030 Agenda for Sustainable Development. The urgent action is to create the enabling fiscal space to foster both public and private investment while ensuring economic diversification.
Some negotiations are yet to be concluded. Are there contentious issues that countries have yet to agree on?
The remaining issues for discussion are matters regarding competition, provisions relating to investment, intellectual property, e-commerce and so on. Countries agreed to take more time to negotiate those issues. The issues are being discussed and will be finalized in the second phase of the negotiations. This is the same process even for other global trade agreements. Negotiations are never concluded at once; discussions on trade issues are broad and take time to be concluded. We want to avoid a situation where AfCFTA opens countries to unfair competition. Africa is leapfrogging in technology, which is why we are already discussing e-commerce. This is very important for countries that are well developed in technology. For those that are not so developed in technology, we must ensure they better understand matters around e-commerce.
The AU and African ministers of trade, having finalized the necessary instruments, formally launched the operational phase of the AfCFTA during an extraordinary summit of heads of state and government on July 7 2019.