Rwanda on Friday became one of the first African countries to declare readiness to trade under the African Continental Free Trade Area (AfCFTA), a landmark trade block that seeks to boost intra-African trade.
Rwanda Minister of Trade and Industry Soraya Hakuzitaremye told CNBC Africa she hopes the agreement will boost Rwandan exports to the rest of the continent and facilitate greater trade opportunities for micro, small and medium size businesses for women and youth.
“It is our hope that the business community has understood that the continental free trade agreement is ready (for them) to start exporting made in Rwanda products to African countries,’’ she said. “It is also an opportunity to secure and source raw materials and inputs from all the African state countries which can support local manufacturing here in Rwanda.’’
Trading under the continent-wide agreement which has been ratified by 34 countries and approved by 54 of the continent’s 55 territories, was formally launched on January 1 this year, opening a market with a combined gross domestic product (GDP) of $3.4 trillion and 1.3 billion people.
The World Bank estimates that if implemented properly, the agreement has the potential to lift up to 30 million Africans out of extreme poverty. However analysts say poor infrastructure, corruption and low manufacturing capacity will prevent the continent from seeing larger trade volumes in the early years.
The Johannesburg-based Daily Maverick Maverick newspaper says while South Africa, Ghana and Egypt have said they are ready to trade, no goods have officially been exchanged under its provision of reduced tariffs.
The deal seeks to eliminate up to 90 percent of tariffs on goods which qualify under its rules of origin. The rules determine the level of local raw materials used in making a product for it to qualify.
Rwanda’s Revenue Authority deputy chairperson Jean-Louis Kaliningondo said the authority ready to implement trading under the agreement, which the founding leaders hope will eventually result in the creation of a common market similar to the European model.