Thursday, July 25, 2024
NewsLogistics pundits eager for AfCFTA implementation

Logistics pundits eager for AfCFTA implementation

Ethiopia to start trial implementation in “a few months”

The Ethiopian logistics sector is waiting with baited breath for Ethiopia’s full accession to the African Continental Free Trade Area (AfCFTA) in hopes the trade deal will catalyze domestic logistics and shipping.

Professionals and officials in the logistics and transportation sector expressed their enthusiasm for Ethiopia’s full commitment to the AfCFTA during a consultative meeting convened by the Ethiopian Logistics Sectoral Association (ELSA) on December 22, 2023.

Gebremeskel Challa, chief AfCFTA trade negotiator and minister of Trade and Regional Integration, announced earlier this week that Ethiopia’s tariff offering submission was accepted by the AfCFTA secretariat earlier this month.

The tariff order was submitted in November, behind the submissions of several other countries. No less than 10 African nations have already started trial trading through the AfCFTA.

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“We will identify the goods and countries to trade with, and we will start the trial phase of trade in the coming few months,” Gebremeskel told the media. “We have a competitive advantage with the likes of Ethiopian Airlines, which can provide cargo services to other countries.”

Several experts and officials involved in the ELSA discussions expressed their hopes that the logistics sector will make better use of the free trade agreement than other sectors.

Among the experts was Matiwos Ensermu (PhD), an associate professor of logistics and supply chain management and a vice president of Addis Ababa University.

He observes that the logistics sector has better awareness than other sectors, but the readiness pertaining to the legal frameworks such as border issues, will likely be a challenge. He also notes that infrastructure issues, such as road and bridge capacities, could cause some trouble.

“The sector is already aware of free trade treaties like AfCFTA. It won’t suffer like other sectors as the logistics sector can be quick in the engagement,” he said.

The sector is also in the process of liberalization, with officials looking to open maritime, aviation and other industries to foreign investment.

The lifting of tariffs that will come with the AfCFTA will encourage growth in the sector, according to Matiwos.

Officials at the Ministry of Trade also foresee slight bumps in the road to AfCFTA.

Samuel Gizaw, a representative of the Ministry, reveals there are a few problems observed in transportation systems, particularly regarding the licensing of transport operators.

He wants to see the implementation of a system that would allow transport operators to work in multiple countries. For example, a license issued in Ethiopia would be valid in Kenya, and vice-versa.

 “With a single document, operators should be allowed to go from one country to another,” he said.

Abenet Belay from the ESLA predicts challenges in the harmonization of legal frameworks and transportation cultures from one country to another.

In Ethiopia, for example, right-hand driving is the norm but neighboring Kenya uses the opposite side of the road. Experts foresee issues like this could be a significant challenge to the implementation of AfCFTA.

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