Trade ministry pushes for overseas capital accounts

On the aim to benefit from service goods in business activities under the CFTA, the trade negotiating committee under the Ministry of Trade and Integration requests the steering committee to consider a significant policy shift for the Ethiopian business community to have an overseas capital account.
The Ministry has also approved a list of goods to go through the tariff removal as well as other sectors that would be totally closed.
“We have submitted the final document to the chairperson of the steering committee led by Mamo Mihretu, Senior Advisor and Chief Trade Negotiator in the Prime Minister’s Office,”Mussie Mindaye, Director General of Trade Relation and Negotiation at MoTRI told Capital, adding, “the chairperson, is responsible to submit the document for final approval.”
The National Macroeconomic Committee led by Prime Minister Abiy Ahmed is the body that will give the final decision on the document.
Though it will be difficult for Ethiopians to benefit from the CFTA or other countries’ service offers as its not allowed to have overseas capital accounts, it needs a policy change expressed Mussie, so as to reel in the desired results. This is also advantageous for the country as it increases import rate of service goods whilst also having the ability to create competition in the market and stabilize prices, he further added.
Mussie expressed his expectation that the document will be approved very soon. “The country shall not be stated as late to come up with the tariff offer of products and services since there are countries that have not yet finished the identification process,” he opined.
So far 34 countries have come up with their tariff offers and 47 countries have submitted their service commitments, while trading has not yet begun.
The CFTA will bring together fifty-four African countries with a combined population of more than one billion people and a combined gross domestic product of more than USD 3.4 trillion.
The main objectives of the CFTA are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union. It will also expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation and instruments across the RECs and across Africa in general. The CFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources. The establishment of the CFTA and the implementation of the Action Plan on Boosting Intra-African Trade (BIAT) provide a comprehensive framework to pursue a developmental regionalism strategy. The former is conceived as a time bound project, whereas BIAT is continuous with concrete targets to double intra-African trade flows from January 2012 and January 2022.