AfCFTA won’t be used for dumping, Kgafela assures



The Minister of Trade and Industry (MTI), Mmusi Kgafela says safeguards have been put in place to ensure that the country’s ratification of the (AfCFTA) deal does not result in dumping by other countries or crushing local businesses.

Last Sunday, President Mokgweetsi Masisi officially submitted the country’s instruments of ratification to the African Union (AU) Commission, ending a four-year journey of negotiations over the pan-African trade deal. Botswana was the 46th country to ratify the deal out of 54 African countries that signed the original African Continent Free Trade Area (AfCFTA) in 2018.

Kgafela said the AfCFTA provides protections such as anti-dumping provisions, countervailing and anti-countervailing as well as protection of infant industry that will cover local businesses from dumping, especially in key manufacturing sectors.

“Our presidents were wise when they started this and they considered that we come from different economies,” the minister told Business Week on Wednesday. “Though the default position is to open borders, there are acceptations that are embedded in the agreement in view of the fact that our economies of scale differ. “When you satisfy the need for an exception to kick in, you are protected.”

Kgafela, however, urged local businesses to push hard and place themselves in a position where they do not need the protections. He said the ratification accords local producers an opportunity to penetrate the African markets noting that the tariffs which have been a hurdle have now been removed.

“The ratification moves us a step closer to realize efforts of becoming an export-led economy. “Local businesses have been experiencing difficulties when exporting due to tariffs which prohibited them from being competitive and resulted in them being sidelined,” he said.

Meanwhile, Kgafela is confident that the Southern African Customs Union (SACU) tariff offer to the AU Secretariat will be accepted, allowing Botswana to begin trading under the AfCFTA. Countries that are members of customs unions are required to approach the AU Secretariat under their unions to finalize their tariff offers and other terms of the AfCFTA, rather than as individuals.

The minister said any issues with the tariff offer would likely be “some small technical glitches” that can be corrected.

The AfCFTA is the world’s largest free trade area developed under the auspices of the African Union to enable the free flow of goods and services across the continent. It is estimated that the AfCFTA has the potential both to boost intra-Africa trade by 52.3% and also boost the continent’s trading position in the global market.

Published on: Mmegi online

Publication Date: 24.02.2023