International trade economist Jan Cernicky says the African Continental Free Trade Area (AfCFTA) has the potential to propel economic growth for African countries, including Malawi.
He said this on Thursday in Mombasa, Kenya during a two-day workshop for financial and business reporters organised by Konrad Adenauer Stiftung (KAS) Media Africa.
Cernicky, who is KAS economist responsible for economy and international trade, said while it is commendable that many countries, including Malawi, have signed and ratified the AfCFTA treaty, it will be important for countries to get the process done immediately.
“When you dig deeper, you find that the ratification does not mean so much because many countries have not decided on the instruments to fully implement the free trade area which makes the market worthless,” he said.
Cernicky decried the perception countries have on AfCFTA in terms of benefits, saying this is delaying its implementation.
He said: “There is a common misunderstanding that free trade maybe bad for poor countries such as Malawi, but to the contrary, if you open the trade barriers you can buy cheaper products from outside which of course may not be good for businesses which produce such products but consumers who are in majority would profit from this.
“On the other hand, if you are a poor country and trade less, you still gain from this because the losers are few and countries such as Malawi should look at the bigger benefit.”
Cernicky said AfCFTA seems to be blocked by different interest groups, adding that countries need to discuss and consider its roll out as it presents a bigger opportunity and benefit to consumers.
Under AfCFTA, 54 African Union (AU) member States will be trading among each other with reduced or removed taxes on certain products. The market of more than 1.2 billion people has a combined gross domestic product of $2.5 trillion.
Malawi has already submitted its tariffs to the African Union (AU) in preparation for AfCFTA the implementation.
Ministry of Trade spokesperson Mayeso Msokera could not be reached for a fresh interview n Thursday, but he is on record as having said that the tariffs were passed together with the 2021/21 National Budget and were submitted to the AU under three categories.
He said the first category is where tariffs have been reduced, the second is the one in which tariffs have not been removed but will be reviewed after 13 years while the last category is of the products which have been excluded.