WINDHOEK – Namibia has indicated to the African Union (AU) that it is ready to sign the African Continental Free Trade Area Agreement (AfCFTA).
This will grant the country access to the continent’s 1.5 billion people and the African market currently valued at nearly N$50 trillion with a total Gross Domestic Product of US$2.46 billion. This was confirmed by Finance Minister, Calle Schlettwein, yesterday during his first of two bi-annual staff meetings with the Ministry of Finance. The AfCFTA gives birth to the world’s largest free trade area since the World Trade Organization was formed in 1995.
“We will open our markets and Namibia will gain access to the African market. We must be able and competitive to enter that massive market. Our financial services, for example, have to be more competitive and must significantly improve to become more efficient to be attractive in the larger African market,” said Schlettwein.
During the meeting at the National Theatre of Namibia where Windhoek-based Ministry of Finance staff members gathered, Schlettwein quelled fears about opening the relatively small Namibian market. “Yes, we are opening our market but we are gaining bigger access and we must make proper use of this access,” said Schlettwein.
He added that Namibia can only fully take advantage of AfCFTA if there is a seamless movement of goods in and out of Namibia’s borders. “We have to become much better at transborder operations than we are now.”
At the beginning of May, President Hage Geingob confirmed that Namibia would sign up to the free trade area agreement. During a meeting with AU Commission Chairperson Moussa Faki Mahamat at State House, Geingob provided assurance that Namibia is fully committed to the integration of the continent and strongly believes that its own economic development depends on advancing regional and continental economic cooperation and integration.
“Africa’s advancement remains first and foremost a matter for Africans. Namibia reiterates her commitment to the
AfCFTA and the Protocol to the Treaty Establishing the African Economic Community Relating to the Free Movement of Persons, Right of Residence and Right of Establishment, and will expedite internal processes to sign and ratify these instruments,” Geingob said.
Moulded in the form of the European Union’s version of free trade, the AfCFTA presents immense opportunities for African countries to trade among themselves in a market valued at nearly US$4 trillion (about N$50.6 trillion) without trade restrictions such as tariffs. By signing up to, the AfCFTA individual African countries agree to remove tariffs on 90 per cent of goods, with only 10 per cent of tariffs applicable on specially defined goods when trading with one another.
The agreement also asks African countries to give preference to ‘Made in Africa’ goods, which, while it is good news, poses a challenge when it comes to ensuring quality standards on goods because not all African countries have the same quality standards and the regulation and enforcement of these standards vary. This is to the extent that multi-national companies trading in consumer goods package goods differently, according to markets where the goods go, to ensure, and pass the inspection of, the varying quality standards in each of the countries they export to.
Geingob noted AfCFTA is an integral part of the broader African integration and development agenda, as expounded in Agenda 2063; it represents an important achievement in the fulfilment of the Pan-African aspirations of the founding fathers of the OAU, who wished for a united and peaceful Africa, enjoying inclusive growth, sustainable development and socio-economic prosperity.