AfCFTA Guided Trade Initiative gains momentum

During the 9th meeting of the AfCFTA Council of Ministers of July 25, 2022 the AfCFTA Secretariat announced the launch of a programme called “AfCFTA Guided Trade Initiative” as a pilot exercise to assess the readiness of seven selected African States to trade on the basis of the new continental free trade area framework. The purpose of the Initiative is to test the procedures and documents introduced by the AfCFTA Agreement by exchanging commercially meaningful goods identified by such States bilaterally at preferential duty rates. Countries included in the Guided Trade Initiative include Cameroon, Ghana, Egypt, Tanzania, Kenya, Rwanda and Mauritius. Recently also Tunisia was added to the list.

In September 2022 two of these countries (Rwanda and Kenya), started the first trade operations under the AfCFTA, both with Ghana. A first consignment of two containers of exide batteries originating from Kenya arrived at the port of Tema on 23 September shipped via sea and cleared under the preferential tariff duties of the AfCFTA. In normal conditions, this consignment would have been subject to full customs duties as Kenya and Ghana, apart from the AfCFTA, are not members of any other Customs Union or Free Trade Agreement. It is however estimated that the shipment needs about six weeks to reach Ghana because there is not enough cargo to transport from one port to the other, with the consequence that the vessel departing from Mombasa has to move first to a transshipment port outside Africa (in Asia or Europe), where cargo can be consolidated with other shipments destined to Africa, and subsequently to Ghana.

On 30 September, also Rwanda exported via air its first batch of locally processed coffee as part of the AfCFTA Guided Trade Initiative. A post circulated on social media by the Rwanda Ministry of Trade and Industry showed the AfCFTA Certificate of Origin issued to accompany the shipment (see figure below).

The Annex 2 on Origin attached to the Protocol on Trade in Goods of the AfCFTA Agreement requires exporters to obtain an AfCFTA certificate of origin (CoO) - whether in hard or electronic form - from customs authorities in their country of his establishment to accompany goods. Alternatively, an origin declaration can be issued directly on the invoice, on the delivery note or on another commercial document to self-certify the originating status of goods. This possibility, however, is limited to shipments whose value is not superior to 5,000 USD, except in the case the exporter is granted by customs authorities with the status of “approved exporter”, as in this case he is admitted to make out origin declarations regardless of the value of the products concerned. The AfCFTA CoO certifies that the goods are originating from the territory of an African State and is delivered on condition that the exporter has proved that his goods have been wholly obtained in his State of establishment or (in case of manufactured or industrial products), if they have undergone a “substantial transformation" in that State Party within the meaning of Article 6 of the Annex on Origin. However, a series of goods listed in Appendix IV are considered as originating goods if they satisfy some particular rules know as “Product-Specific Rules”(PSR). A series of cumulation of origin schemes give more flexibility to the AfCFTA rules of origin by allowing traders of one of the AfCFTA State parties to source inputs and parts originating in any African State for incorporation in their products without loosing the preferential treatment in country of destination of the shipment.

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