AfCFTA Ministers of Trade reach agreement on origin for 850 new products

At the 8^th meeting of the AfCFTA Council of Ministers responsible for Trade, held from 28 to 29 January 2022 in Accra (Ghana), an agreement has been reached on the Product Specific Rules (PSR) annexed to the AfCFTA Protocol on Origin covering 850 additional products.

PSR - also known as “rules of list” - describe the minimum working or processing operations that products manufactured in the territory of AfCFTA Parties by using non-originating inputs imported from third countries must undergo in order to acquire the origin of one of these Parties. Such rules can cover an entire Section of products, or specific Headings or Sub-headings of the Harmonised System (HS). The acquisition of the origin of an African country is a condition for such products to be traded between countries on the continent on the basis of the AfCFTA preferences.

With the agreement reached by Ministers of Trade, the share of PSR agreed by African countries reaches 87,7%. This share is expected to reach 100% by June 2022. The agreement is now being sent to the Heads of States for its endorsement. After that, the new PSR will be incorporated in the current text of the AfCFTA rules of list contained in the Appendix IV, Annex II to the Protocol in goods of the AfCFTA Agreement.

In addition to this achievement, Trade Ministers engaged to conclude negotiations on the Protocols to the AfCFTA Agreement on Investment, Competition Policy, Intellectual Property Rights, Digital Trade, and Women and Youth in Trade. It was directed to conclude all these Protocols by September 2022. At the moment, the number of African countries that have ratified and deposited their instruments of accession to the AfCFTA are 40: Seychelles, Tanzania and Burundi being the latest states to join the list of accessions.

The event follows the recent commercial launch, this month, of the Pan African Payments and Settlements Platform (PAPSS), the system developed by AfreximBank to facilitate intra-African transactions by eliminating the practice of converting the importers’ currency in a hard currency (e.g. US dollar or euro) before being converted again in the currency of the supplier for his payment. Hard currency is a currency that everybody trusts because it maintains its value or even appreciate against weaker currencies, as it suffers less from exchange rate fluctuations. Traders and investors usually prefer to use a hard currency for international transactions because more stable and easily convertible.

Further details about the outcomes of the 8^th AfCFTA meeting of the AfCFTA Council of Ministers are available in this article, while the AfCFTA Secretariat Communique is hereunder.