As Africa is set to kick start the Continental Free Trade Area (CFTA) next year, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says there is need for businesses to be fully equipped in preparation of the area.
The African Union (AU) Commission trade division announced last week that the final paper on the initiative will be presented to the African Heads of State by end of January 2018.
Currently, all the fifty-five countries of the AU have started negotiations on the free trade areas citing issues like legal and institutions, customs, trade remedies, roots of origin and trade liberalisation.
In an interview with Business News, MCCCI president Karl Chokotho said while this is a good development as all African countries would like to see the continental trade grow, there is need for the local industries to be prepared to capitalise on the trade area which opens up trade to a larger market.
“All the different organs like Comesa [Common Market for East and Southern Africa] and Sadc [Southern African Development Community] are working towards the CFTA. What is necessary is that we have to be locally prepared. Industry has to be equipped that is why as government signs all these trade agreements, there should also be an enabling environment for investments and standards” said Chokotho.
On his part, Catholic University dean of social sciences Gilbert Kachamba advised on the need for diversification and addressing the supply side constraints including the inefficiencies in the energy and transport sectors which have made it expensive to trade with the rest of the world.
“The coming in of the CFTA will not bring anything good to Malawi because our exports always primary products which have a smaller market in Africa as a lot of other African countries produce the same products,” he said.
In a separate interview, Ministry of Trade, Industry and Tourism spokesperson Wiskes Nkombezi said free trade areas are meant for businesses hence as government negotiates the trade agreements, the private sector should take advantage of them.
The CFTA will bring together fifty-five African countries with a combined population of more than one billion people and a combined gross domestic product of more than $3.4 trillion. n