NAIROBI, Kenya- The East African Business Council (EABC) has hailed the commencement of the Tripartite Free Trade Area (TFTA) following Angola’s ratification last year.
This crucial ratification brings the total number of Instruments of Ratification to fourteen, meeting the threshold required for the agreement to come into force among the 29 member states.
Adrian Njau, EABC Acting Executive Director, expressed optimism about the TFTA’s potential impact.
“Our dream is to see businesses start trading under the TFTA preferential tariff,” Njau stated.
He highlighted the significant trade volumes between the East African Community (EAC) and other regional blocs. According to the EAC Trade and Investment Report 2022, EAC exports to the Southern African Development Community (SADC) totaled USD 3.79 billion, while imports stood at USD 3.9 billion.
Similarly, EAC exports to the Common Market for Eastern and Southern Africa (COMESA) were USD 6 billion, with imports amounting to USD 4.7 billion.
EAC Partner States trade more with Tripartite member states compared to the rest of Africa due to overlapping membership in SADC and COMESA.
This overlapping membership allows them to benefit from preferential tariff treatment. For instance, Tanzania and the Democratic Republic of Congo (DRC) are in SADC, while Kenya, Uganda, Burundi, and Rwanda are in COMESA.
Statistics indicate that Tripartite countries import over 99pc of the same products exported by the EAC, suggesting a significant market opportunity for EAC exports under the TFTA preferential tariff regime. Key export products include vegetables, meat, bovine, and pasta.
The TFTA aims to eliminate tariffs on 100pc of goods, stimulating economic growth, industrialization, and sustainable development.
It complements the African Continental Free Trade Area (AfCFTA), which aims to eliminate tariffs on 90pc of goods in a market of over 1.3 billion people.
The Tripartite framework is built on three pillars: Market Integration, Infrastructure Development, and Industrial Development.
These pillars focus on improving regulatory and legal frameworks, adding value, diversifying industries, increasing productivity and competitiveness, and implementing programs for structural change.
Member States that have deposited their Instruments of Ratification include Kenya, Angola, Botswana, Burundi, Egypt, Eswatini, Lesotho, Malawi, Namibia, Rwanda, South Africa, Uganda, Zambia, and Zimbabwe.
The launch of the TFTA marks a significant milestone in African trade, promising enhanced market access, economic growth, and industrial development across the continent.
As the EAC and its partners embrace this new trading framework, the opportunities for businesses to expand and thrive under preferential tariffs are immense.
