President Jacob Zuma says South Africa remains committed to boosting intra-African trade, which will be equitably beneficial for all participating countries.
The overriding imperative of the CFTA is to boost intra-African trade, promote market integration and industrialisation in Africa. A bigger market will improve the prospects of African countries to attract investment, promote the development of regional value-chains, thus increase the potential of diversifying the economic base.
We believe that this will contribute positively to economic growth and development in Africa, said the President in response to a Parliamentary question.
President Zuma was asked by the United Democratic Movement's Chief Whip Nqabayomzi Kwankwa if South Africa had taken any steps to ensure that member countries in the Common Market for Eastern and Southern Africa (Comesa) would receive the same revenue they derive from the current free trade agreement (TFTA), given the decision by African countries to establish the CFTA by October 2017.
President Zuma said negotiations towards establishing the CFTA build on the trade liberalisation progress and achievements of the Regional Economic Communities (RECs).
The CFTA will bring together 54 African countries with a combined population of more than one billion people and a combined gross domestic product of more than $3.4 trillion.
The aim is to enhance intra-regional trade and ensure that African countries trade with each other on better terms than third countries.
A free trade area implies granting parties thereto preferential access in terms of tariff duties, which has implications for revenue, said the President.
He said each negotiating party makes its own sovereign assessment about the benefits of entering into the CFTA negotiations and whether they potentially outweigh the negative considerations that arise.
The President said it is not possible to predict with any degree of precision how the CFTA will impact on the revenue base of the negotiating State parties. This, he said, will depend on the export profile of each negotiating State party to the CFTA.
The overriding imperative of the CFTA is to boost intra-Africa trade, promote market integration and industrialisation in Africa.
Source: South African Government News Agency