Monrovia – An African trade expert has warned that Liberia risks losing its state-party position on the Africa Continental Free Trade Area (AfCFTA) agreement if the country does not rectify the agreement soon.
Report By: Aria Deemie | Local Voices Liberia Reporter
The AfCFTA is a trade agreement with a comprehensive scope that includes critical areas of Africa’s economy such as digital trade and investment protection. It became operational on January 1, 2021 with an objective of significantly boosting intra-Africa trade by eliminating barriers to trade on the continent.
The agreement was signed by 54 of the 55 African Union member states, with 44 countries depositing their instruments of ratification. Liberia signed the AfCFTA since March 21, 2018 but is yet to ratify.
“If Liberia does not ratify the AfCFTA, it implies that Liberia is no longer a state party. So Liberiawill not benefit from preferences negotiated within the agreement,”’ explains Dr. Olu Alaba, an expert on African trade. Dr. Alaba, spoke to our reporter December 2, 2022 on the grounds of the Bolton White Hotel, Abuja, Nigeria, during a press conference concerning the AfCFTA ratification and implementation.
Ratification will legally give Liberia the leverage to export to ECOWAS countries tariff free and have other countries export to them as well under similar privileges, Mr. Alaba said.
In the absence of ratification, Liberia has not formally consented to the agreement thus delaying the implementation of the AfCFTA by the west African state. Africa has 55 countries, 1.2 billion populations and US$3.4 trillion in GDP but intra-Africa trade remains very low – between 14% and 15% as compared to exportation.
Therefore, the AfCFTA is meant to increase intra-Africa trade, and provide the necessary negotiating strength in large trade negotiating forums, like the World Trade Organization, Dr. Alaba said.
Highlighting the benefits that Liberia would have when the AfCFTA is ratified, Dr. Alaba stressed that AfCFTA is customized to eliminate all cumbersome processes at the borders and eliminate tariffs on substantial components of intra-continent trade.
“It will help traders reduce the time and costs of doing business, which will finally lead to reduction in cost of goods and services leading to achievement of food security,” he said.
Further speaking on the impacts AfCFTA would have on Liberia’s economy, he said, “Cooperation on investment, competition, and intellectual property components of the AfCFTA are capable of attracting investment into Liberia’s areas of competitive advantage to expand production and trade in those countries across Africa.”
He added that for countries that may be negatively affected by reduced tariff revenue, compensation funds would be created by ECOWAS to address their losses.
Meanwhile, Madam Mawine G. Diggs, Liberia’s Minister of Commerce, says the AfCFTA Agreement is currently being deliberated at Liberia’s National Legislature level, adding that her Ministry is engaged with members of Legislature to ensure the agreement is rectified.
“The Government of Liberia through the Ministry of Commerce and Industry has conducted several stakeholders’ engagements on a National Strategy for the AfCFTA through the support of local consultants with funding from the United Nations Economic Commission for Africa (UNECA),” Minister Diggs.
“A local consultancy has developed the AfCFTA National Strategy for Liberia which is expected to be validated by key stakeholders across the country including Liberian businesses. The goal of the local consultancy is to have a strategy or implementation roadmap in anticipation of the passage of the AfCFTA by the national legislature.”
Minister Diggs stressed that the government is in “full support of the AfCFTA Agreement” due to its huge trade benefits for Liberian businesses, particularly those involved in cross border trade.
“The Agreement, when ratified by the National Legislature will open new markets across Africa, thus providing access to markets which have long taken a toll on SMEs and regional integration through trade. The AfCFTA will then lead to reduction of tariffs on goods as well as lessen restrictions on Liberian service providers in other AfCFTA member countries,” Minister Diggs concluded.