Broadcast Type: Interview; Tags: Continental, Trade, Free, Trade, Area, Sa, Development, Shift, Customs, Duties, Terror, Policies, Guest, Paint, Picture, International, Trade, Administration, Commission, Role, Facilitating, Developments, Challenges, Faced, Influx, Trade, African, Companies, Explain, Rebates
beyond their headline with aldrin symbio right here on safm well african this week the free continental trade area will be enforcing thirty-one countries from around the continent participating will be in the regional trade under the structure we wanted to discuss what the introduction of the african continental trade free trade area means for sa and how this development the customs will shift duties as well as terror our next policies guest will paint a picture of the international trade administration commission's role in facilitating these developments and what challenges with may be faced a new influx of trade among african companies and perhaps explain what rebates are being instituted on certain product categories we are joined by ayabonga now cawe was chief commissioner at the international trade administration commission ayabonga and thank good afternoon for you so much for making time us good afternoon very i'll and thank you much for having us so before go into we the implementation of f done now in wednesday and also the rebates been announced that have by sars do you or that find it it seems as though of africans a lot don't really know what we're talking about when we speak about the african continental free trade area well i find it concerning mean i do out but not necessarily surprising if one considers the relative lack of guess economic i literacy in society let alone the understanding at of how sophisticated between patterns of trade our countries unfold and the complexity one might find that in the tariff having spent i certainly some time at school still find it quite complicated and to some degree eighteen times billion as well so i can imagine only for somebody who sought it hasn't spent five or six years at school studying of this some how difficult it understand and would be to yet it's something that affects of us so all i certainly do find aldrin concerning but certainly not surprising certainly not surprising let's speak about what is set now to unfold on wednesday also considering that there have been pilot phases of the african trade continental free area that already been embarked on and thank you once that again for the opportunity i think it's a momentous occasion aldrin considerable amount a of work workers happened scenes behind the to get to this point where wednesday on at peer one in the port durban of they will be an official ceremony to herald the beginning of trade with the dispatch of goods that are that made in south africa are going to to the continent certainly but something that if one thinks about has been its on the agenda of african people certainly since post independence around nineteen sixty-one to sixty sixty-three also where this notion of trying to at least create integrated trading on the continent that works have been on the agenda i think we have an anomalous the continent situation on ultra we have just a fifth of the shy of global population only but we account for three percent of global trade flows only three percent of global output only two percent of manufactured output and about one percentage point of global steel production big issues so the that we don't trade enough ourselves as among african peoples afc and i think this f d a's process the start of a to bring us closer to improving trade flows among the ourselves by beginning to some of the tariff eliminate barriers about tariff barriers the non to do so so so really that's what it's about to across lines certain tariff begin to reduce tariffs a barrier that serve as trade between african let me countries i mean give you an example case of tomato in the sauce tomato sauce attracts tariff of five general per thanks and under safta the countries that are producing tomato sauce it into exporting south africa would only a play a customs duty of around three percent the in case of padlocked where prior to wednesday these would be if they are coming from african countries coming in at sixteen percent are now going there twelve to be coming in a percent and the general tariffs there at around twenty percent is for other countries in the world that don't come from the continent or any other places where we have free trade agreements or or some form of guess economic i partnerships such as the eurozone so it is so indeed trump material in so far as a reduction tariffs of some of the and some of the taxes if i should say that would be levied parties by different to trained and in this parties would be case the to african countries trying to trade with one another speaking about some of the limitations or that comes are faced when it to intra government trade trade or intra continental on the continent we are told that that this particular pilot will also phase the pan in african payments and settlement systems the but point that has been raised that unfortunately before is these countries african countries are trading in currencies that some of them don't actually have a large reserves of mean for what does this fast tracking payments and also processing of these the well i think great deal of it's a concern but also alongside challenge that is there an opportunity as well on so the part of the challenge you are correct when do say that much of trade is occurring this in currencies necessarily that are not the currencies of issue of some these countries of so if you are trading a exporter with in zimbabwe in all are paying likelihood you that exporter in u s dollar similarly if you're buying fuel from angola it to south bringing africa you are paying for that even a currency that neither wonder pretoria no if troops so it's a big issue but i also see the opportunity in that and this is why some of the protocols have been around issues of payments and digital trade because it does present the an opportunity for fintech ecosystem on the continent to to begin create tokens of exchange or to begin to create means of exchange that some would underpin of this trade between african countries and i think that these are the kinds challenges of and constraints that certainly need continental attention i mean add to that issues of infrastructure i mean it doesn't help access that i can these preferential terms of trade absent roads absent of of rail absent the of all of kind of ground level infrastructure undertake needed to this trade until when think a sense i we have to return back idea that to this measures like this must to assist us undertake much wider planning at levels a continental such that we planned infrastructure regional that enables value chains along different countries job south africa rather than planning its own infrastructure namibia to win its own thing angola doing own their and i think it goes historical back to challenge that the first president of independence post ghana kwame nkrumah raised which is that the kind of characteristic of neo colonialism our continent on is such that it creates fixation this with very small and unviable states are in incapable which of any independent economic development and i and so it's really to start to think do need of economic planning a continental on scale because some of these investments we are talking about you are not that you do investments a pocket in a small market in summits but require much greater and that's why it's quite planning see concerning that you some of the tensions in nicholas instance and other for regional bodies across the continent just quickly speaking about tension and also logistics have south africa as yet experience packed of the m the instability that is in playing out the red sea