The East African Business Council (EABC) has applauded the commencement of the Tripartite Free Trade Area (TFTA), following the ratification by Angola on 25th June this year. This brings the total number of Instruments of Ratification deposited to fourteen, meeting the number required for the Agreement to enter into force out of the 29 member states.
Lauding the new developments, Adrian Njau, EABC Acting Executive Director, stated, “Our dream is to see businesses start trading under the TFTA preferential tariff”
Njau further explained that in 2022, EAC exports to SADC amounted to USD 3.79 billion, while imports totaled USD 3.9 billion. EAC exports to COMESA were USD 6 billion, with imports at USD 4.7 billion, according to the EAC Trade and Investment Report 2022.
EAC Partner States trade more with Tripartite member states compared to the rest of Africa due to overlapping membership in SADC and COMESA, where they benefit from preferential tariff treatment. Tanzania and DRC are in SADC, while Kenya, Uganda, Burundi, and Rwanda are in COMESA.
Statistics show that Tripartite countries import more than 99% of similar products exported by the EAC, indicating that the EAC has a considerable market opportunity to grow its exports under the TFTA preferential tariff regime. This is for products such as vegetables, meat, bovine, pasta, among others.
Addressing competitiveness and supply-side constraints, it is vital for the EAC to seize the TFTA 800 million market. Clear sanctions for non-implementation are also central to the success of the TFTA. The 29 Tripartite Member States represent 53% of the African Union’s membership, more than 60% of continental GDP (USD 1.88 trillion), and a combined population of 800 million. The TFTA is set to eliminate tariffs on 100% of goods, stimulating economic growth, industrialization, and sustainable development. It complements the AfCFTA, which aims to eliminate tariffs on 90% of goods in a market of over 1.3 billion people.
The Tripartite framework is based on three pillars. These are Market Integration, Infrastructure Development, and Industrial Development. These three pillars aim to create a supportive environment by improving regulatory and legal frameworks, adding value, diversifying industries, increasing productivity and competitiveness, and implementing programs for structural change.
The 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.