In June 2018, 53 countries signed the African Continental Free Trade Area (AfCFTA) to create a single market across Africa and facilitate the free movement of goods, services, people, and capital. Making trade work seamlessly between 53 countries belonging to eight regional economic communities was never going to be easy. The AfCFTA Secretariat launched the Guided Trade Initiative to facilitate and accelerate trade between ten countries under the AfCFTA. In this article, we analyze how Cameroon has traded under the Guided Trade Initiative (GTI), the challenges, and actionable recommendations to support its implementation.

1. What is the Guided Trade Initiative (GTI)

To encourage and accelerate intra-African trade, the AfCFTA Secretariat launched the AfCFTA Guided Trade Initiative (GTI) on 7th October 2022 to allow 10 countries to start trade under the AfCFTA. The countries currently involved in the AfCFTA GTI include Algeria, Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, Tunisia, and South Africa. The AfCFTA Secretariat chose countries for the Guided Trade Initiative (GTI) based on whether their tariff offers on goods were fully approved and officially published, allowing them to test AfCFTA trading documents and procedures on pre-selected shipments.

“The legal basis for the AfCFTA GTI is provided for in Article 13 (3-j) of the Agreement which mandates the Council of Ministers to make regulations, issue directives, and make recommendations by the provisions of the AfCFTA Agreement, and detailed in Ministerial Directive 1/2021 of the 7th Meeting of the AfCFTA Council of Ministers responsible for Trade of 10th October 2021””. Bama Etienne Bama , AfCFTA GUIDED TRADE COORDINATOR, CAMEROON

The Guided Trade Initiative improves matchmaking among businesses and products for import and export between interested state parties in coordination with their national AfCFTA implementation committees.

2. Objectives of the AfCFTA Guided Trade Initiative (GTI)

The three major objectives include;

• To facilitate meaningful trade under the AfCFTA
• To test the operational, institutional, legal, and trade policy environment under the AfCFTA;
• To send an important and positive message to African economic operators.

After a consultative session between the Minister of Trade and technical agencies with a mandate on international trade issues, the Cameroon National Shippers’ Council was mandated on September 8, 2022, to host the GTI Ad-hoc Sub-committee. This agency is also mandated as the government agency responsible for trade data collection, capacity building of exporters and importers, trade facilitation, trade and transport infrastructure development as well as export promotion. Meanwhile, we at CEPI focused on democratizing export procedures, boosting access to finance, and ensuring businesses understand how to adjust to the trade finance realities.

3. Cameroon’s Trade Under the AfCFTA and GTI

• Cameroon began utilizing AfCFTA trade benefits in October 2022, with Gic Afatex becoming the first company to export goods under AfCFTA rules, sending safou, dried pineapples, and ginger to Ghana. The customs administration issued the first AfCFTA Certificate of Origin for its products bound for Ghana on October 6th, 2022.
• In October 2022, Cameroon Tea Estate and Ndawara Tea Estate became the first companies after GIC Afatex to export goods under the AfCFTA regime, shipping 38.6 kg of tea to Ghana, marking a significant step for intra-African trade while the first containerized export under AfCFTA was 99.4 tons of aluminum ingots to Algeria.

4. Imports have been limited due to Integration Challenges

Some businesses expressed their desire to import under the GTI but have been confronted by two challenges, which include;

1. Non-eligibility of the exporting country.
2. Non-liberalization of products at this stage by the Economic and Monetary Community of Central African States (CEMAC).

Urea from Nigeria: There was a case of Granular Urea- HS Code 31021000 (fertilizer) where a distributor who previously imported from Ukraine had to switch to Nigeria, where Dangote Fertilizer is producing Granular Urea. The import from Cameroon to Nigeria could not take place under the AfCFTA because Nigeria has not completed its domestic processes and made available the AfCFTA tariff book at the border, as well as the AfCFTA Certificate of Origin.

Plaster from Tunisia: Another case was an importer of plastics from Tunisia – HS Code 25.20.20.90 who wanted to import under the GTI. The CEMAC’s etariff book published by the AfCFTA Secretariat states a phase-out period of 13 years, even as tariffs will only be dismantled from the 6th year (2026). As such, the implemented Most Favored Nation (MFN) tariff is 10% under the agreed schedule of tariff liberalization. After 2026, the CEMAC region will apply a 0.77% tariff reduction until it reaches zero tariffs by 2033.

After three years, what lessons can we draw from the implementation of the AfCFTA?

Based on the work from the local actors and the engagement with local stakeholders, some lessons can be learned.

• State parties should gazette domestic procedures, relevant existing laws, and or updated reforms to effectively implement the AfCFTA, and the implementation of tariff schedules should be integrated into the daily customs management processes and procedures.
• CEPI is calling for a detailed step-by-step guide to enable exporters and importers to trade under the AfCFTA without having to reduce trade costs and encourage exports.  
• A fully automated system where tariffs are automatically applied based on product and goods category, and any related payments should be digitized to reducethe  risks of bad governance.
• CEPI provides several trainings every year on export and import procedures, but we need to vulgarize such training to ensure that more businesses have access to import/export procedures.
•  Accelerate the creation of Special Economic Zones in Limbe,  Baffousam, and Garoua to attract foreign direct investment and boost industrial capacity to meet the growing demand in emerging markets.
• Fund relevant committees and initiatives across Cameroon to deliver the promise of the AfCFTA.
• Importer and exporter data should be shared formally on the websites of the Cameroon National Shippers’ Council, as they are mandated to collect and share relevant information about the AfCFTA. This will enable stakeholders to identify relevant value chains, carry out importer/exporter analysis, and readily identify new opportunities.

Conclusion

Remember that the AfCFTA provides for a gradual tariff reduction scheme implemented as follows: the tariff of 90% (5,838 tariff lines) of goods will be gradually reduced, in equal annual installments, until they are eliminated within 5 years for countries that are not among the least developed countries (LDCs) and 10 years for least developed countries. The tariff of 7% (408 tariff lines) of goods considered sensitive products will be eliminated in 13 years for LCDs and 10 years for other countries. The remaining 3%(175 lines) of goods will be excluded from tariff obligations and will therefore not be subject to liberalization.

The AfCFTA Guided Trade Initiative (GTI) allows participating countries to begin trading under the AfCFTA as they have met a minimum legal requirement with relevant laws and processes in place. Going forward, all AfCFTA member countries should accelerate the implementation of the AfCFTA and move from laws to practical implementation of the agreement. Digitizing the processes and training customs officials across all trade routes will ensure businesses can benefit from the AfCFTA sooner.

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