Experts expect Ethiopia to experience issues related to the AfCFTA; say needs to revise trade policies

Recent reports paint a bleak picture for Ethiopia’s prospects in the African Continental Free Trade Area (AfCFTA) if the country does not move towards becoming more integrated with its neighbors and the rest of Africa. 

Many also suggest that both the pace and nature of Ethiopia’s current economic reforms are not lacking when it comes to seamlessly working within the AfCFTA framework.

Talks held between the Ethiopian Trade Association and the Pan-African Chamber of Commerce and Industry during the last few weeks have revealed that the current state of the private trade sector in the country is lacking. 

Both parties recognise that if these issues are not addressed in a timely manner, Ethiopia might end up serving as a ‘dumping ground’ for goods and products from other countries according to Ethiopian Trade Association President Melaku Azezew. 

Melaku cited the diminished capabilities of Ethiopia’s private trade sector, the lack of raw materials, gaps in technological and digital resources, and the low quality of products as factors that are going to affect Ethiopia’s competitiveness once the AfCFTA achieves a significant level of its planned operations. 

The lack of foreign currency in the country due to the preference of Ethiopian merchants to trade with foreign merchants instead of local ones has also been cited as a structural problem that needs to be addressed before the country can benefit from the AfCFTA.

Experts are also wary that Ethiopia has so far not listed the types of goods and products it intends to trade under the tariff free section of the AfCFTA. Muse Mindaye, Director of Trade Relations and Negotiations at the Ethiopian Ministry of Trade and Industry, says that this is not an issue. According to him, his institution has already listed the items it wishes to trade tariff free and is currently waiting for the Ministry of Finance to give the final green light.

Ghana is the only country that has started making tariff free shipments so far, so it does seem that Ethiopia does have time to sort out the issues that might hamper its performance within the AfCFTA framework and actually leverage both the trade bloc and the reforms it brings about.

Ethiopia Business Review

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