Posted on February, 28, 2022 at 09:05 am
The East Africa Business Council (EABC) has urged players in the private sector to contribute in informing the regional bloc’s negotiations on Trade in Services under the African Continental Free Trade Area (AfCFTA).
This is in line with the ongoing development of a strategy on trade-in services by the East African Community (EAC), which is set to position the bloc better in the negotiations of service liberation at the continental level, according to Peter Mathuki, Secretary-General of EAC.
The regional business body convened over 200 service sector leaders, development partners and high-level policy decision-makers from the EAC region and beyond to discuss the contribution of private sector in EAC offers negotiation under the AfCFTA on February 24.
The EAC is negotiating AfCFTA as a bloc.
The African Union member states agreed on five priority services namely; financial services, communication, transport, tourism and business services.
These form part of seven service sectors which the EAC partner states made commitments to be liberalized since 2010 when the EAC Common Market Protocol came into force.
John Bosco Kalisa, Chief Executive of EABC, said it is very important that the five priority service providers get involved in preparation EAC commitments on Trade in Services to ensure that the region will be able to benefit from the joint African market.
“The collaboration of the EAC Governments and Private Sector in preparation of Trade in Services Strategy is crucial in enhancing the region’s competitiveness which will then attract investment in service sectors from African countries and outside the continent,” he said.
However, he emphasized that there is a need for a conducive business environment for trade in services to adapt to new changes which will be brought by the liberalization of services with other African countries and tap into new emerging opportunities in the trade-in services.
Currently, services account for 54 percent of African Gross Domestic Product (GDP) and 75 percent of Greenfield Foreign Direct Investment (FDI) in the continent.
Dorica Phiri Nkhata, Advisor of Trade in Services at EAC Secretariat, said that limited participation of private sector and knowledge on technical offers development hinders liberalization of services in trade.
She urged that more audits and studies should be done to support comprehension of existing laws and regulations on services in Africa.
Million Habte, Senior Expert on Trade in Services at AfCFTA Secretariat revealed that the deadline for finalization of negotiation on liberalization of trade in services is set for June 2022 by the Council of Ministers.
He expounded that 46 State Parties to the AfCFTA have submitted their initial offers on liberalization of Trade in Services schedules of specific commitments.
“State Parties who have submitted their initial offers on service liberalization but have not ratified the agreement are expected to do so in good faith,” he added.
According to United Nations Conference on Trade and Development report in 2017, only 22 percent of African trade are services while exports remain highly concentrated on agriculture and primary goods.
Kalisa noted that Africa accounts for only 2 percent of global service exports and African service exports are largely dominated by travel (42 percent of African service exports).
Considering that the AfCFTA will give the bloc access to an extended market of more than 900 million people, the EAC has recently met the minimum requirements to start trading it.
Source: The New Times