Building capacity to help Africa trade better

The AfCFTA Secretariat: Is the Action now in Accra?


The AfCFTA Secretariat: Is the Action now in Accra?

The AfCFTA Secretariat: Is the Action now in Accra?

The Assembly of the African Union (AU) met virtually in Johannesburg on 5 December 2020 and adopted several important decisions about interim trade arrangements, the completion of the AfCFTA negotiations, as well as establishing AfCFTA structures and practices.[1] One of these noted the outcomes of the 3rd Meeting of the Council of Ministers to transfer the coordination of the AfCFTA negotiations from the AU Commission to the AfCFTA Secretariat. It requests the Commission to collaborate with the AfCFTA Secretariat, to prepare a draft concept note and Decision on the transfer of functions from the Commission to the AfCFTA Secretariat, including the structural, legal, and financial implications.

The discussions about the implementation of the AfCFTA are now squarely on the table. The indications are that we might see a new and necessary shift to an aspect not traditionally part of African integration efforts, namely the importance of robust institutions.

This development should be seen against the background of what the AfCFTA Agreement provides for in terms of institutions and their powers. The Institutional Framework for the Implementation of the AfCFTA is defined in Article 9 of the AfCFTA Agreement. The AU Assembly shall provide oversight and strategic guidance.[2] The Council of Ministers reports to the Assembly, must ensure effective implementation and enforcement of this Agreement, delegates responsibilities, prepares rules of procedure, supervises the work of all committees and working groups, makes regulations and issues directives, considers reports of the Secretariat, is involved in the making of regulations for the staff and finances of the Secretariat as well as its organizational structure, approves the work programmes of the AfCFTA and its institutions, and considers the budgets of the AfCFTA and its institutions (which will include that of the Secretariat).[3] It shall also determine the “roles and Responsibilities” of the Secretariat.[4] Decisions taken by the Council of Ministers (taken on the basis of consensus) shall be binding on all State Parties.

The December Decision of the AU Assembly takes matters further. This calls for the following observations: 1. The Secretariat is a permanent AfCFTA institution and has been designed to be more than an administrative centre. 2. The AfCFTA Secretariat needs the necessary resources and mandate for implementing a vast agenda; from developing technical capacity within the State Parties, the coordination of the activities of the technical bodies to implement the Protocols and Annexes, to blending the RECs and other existing African trading arrangements into one continental Free Trade Area. 3. The Secretariat will also play a role in future AfCFTA negotiations.

It is not yet possible to speculate about the outcomes of these developments. The Secretariat is not yet fully staffed and established. When the report requested by the Assembly last December is tabled, there will be indications of what lies ahead and how the AfCFTA project may move to a higher level of institutional capacity.

Additional AfCFTA bodies will be formed in terms of provisions in the Protocol on Trade in Goods and its Annexes, the Protocol on Trade in Services, and the Protocol on Dispute Settlement. These bodies will also be aligned to the Secretariat and how it will perform its functions to get the AfCFTA on a sound governance footing. The African Trade Observatory (ATO) will, once up and running, be responsible for information on trade data, market conditions, regulations, and about registered exporters and importers. This could improve trade governance and policymaking considerably, but the collection of trade data is a national responsibility. In many instances this function needs to be improved and coordinated. Improving capacity at national level to collect, verify, clean and publish trade data regularly and expeditiously is not only important for domestic policy processes, but also important to monitor and review the impact of trade agreements, including the AfCFTA.

The AfCFTA Online Mechanism for Reporting, Monitoring and Elimination of Non-Tariff Barriers (NTBs)[5] will replicate mechanisms of the same kind already existing in Southern and Eastern Africa and in ECOWAS. If the AfCFTA Online Reporting Mechanism becomes part of the Secretariat, it could become more effective. Presently these platforms allow for complaints by private parties about NTBs but do not have the powers to remove systemic governance failures.

It seems there are additional plans about more consolidation. Even the private sector may be involved. One of the December AU assembly decisions welcomed “the establishment of the African Business Council (AfBC) which is part of the Architecture of the AfCFTA”.

Other complementary initiatives may be better served when undertaken by specialized structures. An example is the Pan African Payments and Settlements System (PAPSS) which is being launched by the African Export-Import Bank (Afreximbank). This will provide for a centralised payment and settlement infrastructure for intra-African trade and commerce. There can be major benefits through an alternative to the current high-cost and lengthy correspondent banking relationships. Trade among African countries will benefit from a simple, low-cost, and risk-controlled payment clearing and settlement system. Afreximbank is also working on the need to address adjustment costs, in the form of a $1bn Adjustment Facility – especially for least developed countries – to provide support in the form of loans to assist affected Governments with adjusting to the costs of trade liberalisation. It will also provide support to Governments for establishing Quality Assurance Infrastructure in the form of testing and certification capacity and institutions.

[1] Ext/Assembly/AU/Dec.1(XIII)

[2] Art 10(1) AfCFTA Agreement.

[3] See Art 11(3) AfCFTA Agreement.

[4] Art 13(6) AfCFTA Agreement.

[5] https://tradebarriers.Africa

About the Author(s)

Gerhard Erasmus

Gerhard Erasmus is a founder of tralac and Professor Emeritus (Law Faculty), University of Stellenbosch. He holds degrees from the University of the Free State, Bloemfontein (B.Iuris, LL.B), Leiden in the Netherlands (LLD) and a Master’s from the Fletcher School of Law and Diplomacy. He has consulted for governments, the private sector and regional organisations in southern Africa. He has also been involved in the drafting of the South African and Namibian constitutions. He grew up in Namibia.

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