South Sudan and Somalia are currently under scrutiny for their delays in ratifying two crucial trade agreements that are integral to the economic integration and growth of the East African region. The East African Business Council (EABC), a prominent private sector lobby, has urged the East African Community (EAC) to expedite the implementation of these agreements amid rising frustrations from the business community.
The two key agreements in question are the Tripartite Free Trade Area (TFTA) and the African Continental Free Trade Area (AfCFTA). The TFTA is designed to integrate the EAC economies with the Common Market for Eastern and Southern Africa (Comesa) and the Southern Africa Development Community (SADC), thus creating a unified trade zone that facilitates smoother trade and economic cooperation among member states. The aim is to harmonize trade rules and reduce barriers, making it easier for businesses to operate across these blocs.
The TFTA was established to address the fact that EAC member states trade more with Comesa and SADC than with other African regions. However, the agreement has struggled to come into force due to the insufficient number of ratifications. While 11 countries have ratified the agreement and 23 have signed, South Sudan and Somalia have neither signed nor ratified it. This delay is a significant setback, considering the agreement’s potential to streamline trade processes and boost regional economic integration.
Similarly, the AfCFTA, which is the largest trade agreement on the continent, has faced challenges. Although Kenya has successfully shipped tea to Ghana under this agreement, other nations, including South Sudan, have been slow to sign and implement the AfCFTA, further complicating the process of economic integration. The AfCFTA aims to enhance intra-African trade by creating a single market for goods and services, but the slow ratification by South Sudan is impeding its full realization.
The EABC has highlighted that South Sudan’s delays in ratifying both the TFTA and AfCFTA are obstructing progress. The EABC’s policy priority document for the 2024-25 financial year underscores the need for South Sudan to promptly ratify these agreements and adhere to the EAC Common External Tariff and trade liberalization commitments. The lobby also points out that the lack of finalized bilateral tariff offers by Tanzania, Egypt, and some EAC members is exacerbating the delays.
Furthermore, the EABC has raised concerns about the EAC’s internal processes, noting that the lengthy negotiations and disagreements over tariff lines and rules of origin under the AfCFTA are slowing down the implementation. Partner States have yet to finalize common positions on contentious issues, including the treatment of products manufactured in Export Processing Zones.
As of the last meeting held from January 29 to February 1, 2024, the EAC has made some progress but still faces hurdles. The EABC’s document specifies that partner states need to complete national consultations on outstanding tariff lines by March 31, 2024, and that the Secretariat must organize a meeting of experts and Permanent Secretaries by April 30, 2024, to finalize the tariff categories.
In conclusion, the delays by South Sudan and Somalia in ratifying the TFTA and AfCFTA are significant impediments to regional economic integration. The EABC’s call for urgent action reflects the broader frustration within the business community, which views these agreements as vital to unlocking economic potential in East Africa. The successful implementation of these trade pacts is essential for fostering economic growth, reducing trade barriers, and enhancing regional cooperation across the continent.
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