Comoros National Assembly gives go-ahead for AfCFTA ratification

On Monday 30 January 2023, the National Assembly of the Union of Comoros opened its first extraordinary session of the year 2023. One of the main issues tabled for discussion was the approval of a bill authorising the President of the Union of the Comoros to ratify the Agreement on the Establishment of the Continental African Free Trade Area (AfCFTA). This bill was unanimously adopted on 6 February, after the Foreign Relations Commission of the National Assembly concluded the audition of the Minister of Foreign Affairs, who illustrated the advantages for Comoros to join the Agreement in an audition held on 31 January, summarizing them in two concepts: 1) increase in the volume of trade with other African nations and 2) opportunity to stimulate export diversification in Comoros.

After the formal ratification of the AfCFTA by the President of Comoros, occurred on 11 February, the ratification instrument will need to be deposited with the African Union Commission Chairperson, as established by art. 24 of the Agreement.

Although the Comoros signed the AfCFTA in Kigali already on 21 March 2018, the ratification process took long. This mainly happened because of the strong resistance shown in the country by both the public and the private sector: the first one concerned about the risk of loss of customs revenues, the second worried that the sale of Comoros products on the internal market could be threatened by a total removal of customs duties on similar products imported by other African countries, given the uncompetitiveness of the local manufacturing sector, compared to other African States. Currently, in Comoros, customs revenues contribute to the national budget for more than 65%.

Many sensitization workshop have been conducted to overcome such a resistance, the last one held by United Nations Economic Commission for Africa (UNECA) in December 2022. This experience represents an important lesson about obstacles that, especially in Africa, hold back the implementation of the AfCFTA and of Free Trade Agreements in general, after their signature.

As it is known, the AfCFTA aims at liberalizing 90% of inter-African trade by progressively bringing customs duties down to 0% within a time frame of 10 years for countries classified by the United Nations as “Less Developed Countries” (LCDs) and 5 years for middle-income or more developed countries. Six African nations (Ethiopia, Madagascar, Malawi, Sudan, Zambia and Zimbabwe) have been allowed to complete tariff liberalisation in a longer time frame of 15 years. In addition to such 90% (so-called Category A of products), another 7% of products classified by each African nation as “sensitive goods” (Category B), are subject to a liberalisation period of 13 years for LDCs and 10 years for non-LDCs.

With regard to the poor level of diversification of the Comoros export basket, a report from UNCTAD published last summer, pointed out that Comoros is one of the African countries with the highest export concentration. In particular, spices alone account for 98.7 per cent of the commodities exports, concentrated in few products, such as cloves, ylang-ylang (a flower which is used to make several types of essential oil for production of perfumes) and vanilla. On the other hand, the report notes that the country exports more services than goods, expecially travel and transport services. An untapped potential is, on the other hand, held by Comoros in the agriculture, fishing and tourism sectors.