Connect with us

Business News

Africa’s smaller economies secure 13-year fragile sector protection

The LDCs, which constitute over 50 per cent of Africa’s 54 countries, are still heavily dependent on the trade taxes to fund their national budgets

Published

on

Africa’s smaller economies secure 13-year fragile sector protection

Africa’s 32 Least Developed Countries (LDCs) have secured a 13-year reprieve to protect their sensitive economic sectors from duty-free imports under the African Continental Free Trade Area (AfCFTA) agreement, in a major concession aimed at securing their ratification of the deal.

The matter of tariff concessions has been a sticky issue for the LDCs, which have expressed fears that implementation of the AfCFTA agreement beginning July 1 next year will lead to heavy revenue losses.

The LDCs, which constitute over 50 per cent of Africa’s 54 countries, are still heavily dependent on the trade taxes to fund their national budgets.

READ: Africa Continental Free Trade Area (AfCFTA) launched

Only about 15 per cent of trade by African countries takes place within the continent, with most commodity-dependent countries shipping out their goods to global partners.

“Despite low levels of intra-Africa trade, tariff revenue is still an important source of government revenue, and remains an important measure to reduce import competition and so protect domestic industry,” says Benedict Musengele, the acting Director-in-Charge of Trade, Customs and Monetary Affairs Department at the Comesa Secretariat.

Tariffs –

Tariff liberalisation is, however, only expected to lead to a limited expansion in intra-Africa trade.

Exchange of goods and services on the continent is still highly concentrated within the regional economic communities (RECs), with more than half of the total trade taking place in the Southern African Customs Union (SACU), and more than 65 per cent in the Southern African Development Community (SADC).

READ: African leaders set to sign landmark trade deal at AU Summit

The 13-year reprieve comes at a time when the Africa Export-Import Bank (Afreximbank) has announced a $1 billion financing facility to support countries to adjust in an orderly manner to the sudden revenue losses as a result of the implementation of the AfCFTA agreement.

The AfCFTA member-countries have agreed to liberalise 90 per cent of their tariff lines with the remaining 10 per cent divided into two categories, where 7 per cent are classified as sensitive products, while three per cent is to be totally excluded from the requirement to liberalise.

Tariff liberalisation –

It is argued that although the AfCFTA, which was officially launched at the 12th Extraordinary Summit of the African Union in Niamey, Niger July 7, enjoys considerable political support, individual member states still face difficult choices.

Africa’s economies vary considerably in size, levels of economic development and diversification and without exception, they face challenges to create jobs, develop their industrial sectors and diversify their production capacity.

READ: Africa’s continental free trade deal: Single market on the horizon?

Trade agreements –

The launch of the AfCFTA seeks to create a single market of over 1.2 billion people and open up markets with a combined $3 trillion in GDP, which is currently dominated by Nigeria, South Africa and Egypt. All the countries, except Eritrea, have signed the agreement, while 27 have ratified it.

The idea to launch the AfCFTA was mooted in 2012 to promoting country-to-country trade, boost economic growth, increase the competitiveness of the continent’s economies and create employment. Negotiations were launched in Johannesburg, South Africa in 2015, where the heads of states and governments issued a timeline of two years to complete the negotiations.

READ: Africa Free trade deal set for take-off following Gambian ratification

The negotiations were completed in December 2017 in Niamey, Niger and the report presented to the heads of states and governments in January 2018, leading to a signing ceremony on March 21, 2018 in Kigali Rwanda, where 44 countries immediately signed up.

On April 29, the agreement received the minimum threshold of 22 ratifications for it to come into effect.

However, the pact legally came into force on May 30 in line with the provisions of the agreement which binds member countries to put into operation the free trade area 30 days from the day the 22nd country ratified the agreement.

READ: Nigeria and Benin sign landmark AfCFTA deal at AU Summit in Niamey (Updated)

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading
Click to comment

Leave a Reply

Business News

Nigeria to sign military cooperation deal with Russia

Nigerian President, Muhammadu Buhari is due to meet Putin on the sidelines of a Russia-Africa summit in Sochi

Published

on

Nigeria to sign military cooperation deal with Russia

Nigerian President, Muhammadu Buhari hopes to sign a military-technical cooperation deal with Russia at talks with President Vladimir Putin this month that will help it fight Boko Haram militants.

The Nigerian leader is due to meet Putin on the sidelines of a Russia-Africa summit in the Black Sea city of Sochi amid a push by Moscow to expand its influence in Africa.

“We’re sure that with Russian help we’ll manage to crush Boko Haram, given Russia’s experience combating Islamic State in Syria,” Nigerian envoy, Steve Ugbah said in an interview with Russia’s RIA news agency, adding that Nigeria was interested in purchasing Russian helicopters, planes, tanks and other military equipment.

Ugbah says a military-technical cooperation deal between Russia and Nigeria had already been drafted and that it is awaiting finalisation. 

“We hope President Buhari can take the talks to their logical end. The agreement will open new possibilities in such areas as the supply of military equipment and training for specialists,” he adds.

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading

Business News

Nigeria, Cameroon to plan Cocoa price cartel

The plan suggested by Nigeria is part of a trend by cocoa growers in West Africa and Latin America

Published

on

Nigeria, Cameroon to plan Cocoa price cartel

Nigeria aims to team up with Cameroon to agree on a premium for its cocoa with buyers, after the world’s top growers, Ivory Coast and Ghana set a price floor for the crop.

The plan suggested by Nigeria, the world’s fourth-largest cocoa producer, is part of a trend which has seen growers in West Africa and Latin America seek to influence prices in the global market.

The move follows Ghana and Ivory Coast’s union in July, which set the price for a ton of cocoa from their countries at $2,600 plus a $400 premium described as “living income differential”.

READ: Cocoa industry stakeholders accept Ghana, Ivory Coast price

Both countries produced 60 per cent of the world’s cocoa in 2018.

Vice President of the World Cocoa Producers Organisation, Sayina Riman says discussions will be held with the private sector and the Nigerian Government before formal talks are held with Cameroon.  

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading

Business News

Exxon to invest $500 million in Mozambique LNG project

Construction of onshore facilities has been awarded to a consortium led by Japan’s JGC, U.K firm TechnipFMC and U.S. company, Fluor Corp

Published

on

Exxon to invest $500 million in Mozambique LNG project

Exxon Mobil plans to invest more than $500 million in the initial construction phase of its liquefied natural gas (LNG) project in Mozambique.

The U.S. oil company’s $30 billion Rovuma LNG project, jointly operated with Italy’s Eni, has a capacity of more than 15 million tonnes a year (mtpa) and is set to pump much-needed cash into the country’s ailing economy. 

“The Area 4 partners will advance midstream and upstream area project activities of more than $500 million as initial investments,” Exxon head of power and gas marketing, Peter Clarke told a ceremony in Mozambique’s capital Maputo on Tuesday.

Construction of onshore facilities has been awarded to a consortium led by Japan’s JGC, U.K firm TechnipFMC and U.S. company, Fluor Corp.

“These EPC (engineering, procurement and construction) contracts cover the construction of two natural gas production trains with a total capacity of 15.2 million tons per annum, as well as associated onshore facilities,” Clarke adds.

Final investment decisions, a term used by the oil industry to mean the commercial and regulatory aspects of a project are finalised, will be made in 2020.

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading

Trending