Lankan companies must tap African Market worth US$3.4 Tn
Sri Lanka companies must use maximum benefits out of the African Union Free Trade Agreement where manufactured goods and services will not incur duties and tariffs.
When goods are transported from one African country to another for instance, if goods are transported from Cairo, Egypt to Johannesburg, South Africa may that be by air, sea or overland there are no customs duties to be paid, said Ranjiv Goonawardena Chairman of International Consultants.
This is a great opportunity for some of the companies in Sri Lanka to take full advantage of exporting the goods and services he said , at an Africa export-orientated webinar held in collaboration with the Sri Lanka Export Development Board and the Sri Lanka High Commission in Pretoria.
This agreement creates a continent-wide market embracing 54 countries with 1.3 billion people and a combined GDP of US$3.4 trillion. In time to come, which will create a single market similar to the internal market of the European Union where goods and services can be imported and exported without any tariffs plus duty free.
“Another crucial component is that the majority of the African countries are deemed as least developed economies under the UN description; thereby being eligible for trade preferences, development financing, including official development assistance, debt relief, technical assistance and other forms of support. This means that they have free access to the European and the American market duty free, indicating Sri Lankan companies could even manufacture goods in the African continent creating three accessible markets.”
Goonawardena also stated Sri Lanka has a competitive edge compared to its rivals from the Western Hemisphere as the cost of labour being far less in comparison to its counterparties. “Hence the African free trade agreement areas can be a tremendous opportunity.”
With the overwhelming current economic crisis in Sri Lanka, most companies and corporations will not have access to the liquidity of capital but that’s not the case in the African context. Why, because there is funding for all sorts of projects, may that be from the European Union which has pledged 150 billion euros ($170 billion) for investment in Africa as it seeks to gain influence on the continent and become its partner of choice. International consultants can access this type of funding for projects in the African continent.
This event will provide a great opportunity for Sri Lankan companies and corporations to look at the alternative African market. “This is a way Sri Lanka can export itself out of the current economic crisis which has beset the island.”