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Business News of Friday, 28 August 2020

Source: Eye on Port

Customs reveals arrangement to liberalize over 90% of tariffs during AfCFTA implementation

Panelists on the Eye on Port show Panelists on the Eye on Port show

A Chief Revenue Officer of the Customs Technical Services Bureau, Customs Division of the Ghana Revenue Authority, Fechin Akoto has disclosed that African Customs are working towards eliminating substantial amount of tariffs upon commencement of the African Continental Free Trade Area.

“7% of the tariff lines fall under sensitive products. That one we would liberalize but not immediately. We shall progressively reduce the tariffs over a period of 13 years.”

He continued that, “For 90% of goods, we shall immediately remove our tariffs from them. Then the rest, which is 3%, is the exclusive.”

He stated that these initiatives are efforts Ghana’s Revenue Authority as well as other African countries within the continental trade agreement are embarking on to ease the tariff burden on goods traded among member countries.

He made this revelation while participating in an Eye on Port discourse on Understanding the Trade Protocols in the AfCFTA from a Customs Perspective.

The Customs official said party states to the AfCFTA have been given ample time to align their laws with that of the new trade protocols and this would go a long way to enhance customs cooperation.

“Member states have been given some time to make sure that they align their national laws with the AfCFTA agreement. So that, wherever any country will have to encounter contrary provisions against national laws, then you bring them into alignment.”

He said that to aid information sharing, an IT Committee has also been set up to facilitate the usage of a common platform for customs services.

Product specific rules, according to the Customs official, would be adopted in this new protocol.

“The AfCFTA would use what we call the Product specific rules. These rules cover the whole HS nomenclature. It means for every product the chapter has a rule, the heading has a rule and then the subject has a rule. The product specific rules would have what we call the wholly obtained, non-originating materials and specific processing basically. Each will form the core rules under the product specific regime,” he explained.

On the scepticism expressed towards the accuracy in determining the origin of traded products, Fechin Akoto allayed all fears, saying customs have in place mechanisms to enforce rule of origin.

“As customs, we have to know the features of Kenyan flowers for example, in comparison to flowers from the Netherlands. We should know fish from our waters and fish not from our waters. We have the training and skills to do so,” he maintained.

The Chief Revenue Officer of the Customs Technical Services Bureau also revealed that African Ministers of Trade have asked for the establishment of modalities for which free zone companies can trade within the AfCFTA.

“The technical working group is yet to come out with the modalities. Until then, I do not think the Free Zones will for now trade in the AfCFTA,” he confirmed.

He also highlighted that unlike ECOWAS, the AfCFTA has in place a conflict resolution system to take care of issues between trading parties.

Fechin Akoto also stated that a directorate where goods within the continent can be sourced from is being prepared to make trading convenient for Africans.

He also revealed that the Afreximbank is developing a special payment system that would allow payments to be done in the local currency to reduce the dependency on foreign currency on the prices of goods and services.

Fechin Akoto, the Chief Revenue Officer of the Customs Technical Services Bureau, clarified however that, whereas the duty component is free for goods eligible for trade with the African Continental Free Trade Area, other tax components like levies remain.