Ethiopia is contested to fully embrace the African Continental Free Trade Area (AfCFTA) due to slow progress on cross-regional payment systems, potential tax revenue losses, and underdeveloped logistics infrastructure. With preparations underway for the trial period known as the Guided Trade Initiative (GTI), representatives from the Ministry of Trade & Regional Integration (MoTRI), the Ethiopian Customs Commission, commercial banks and private logistics firms, convened to address these lingering impediments last week.

The Ministry of Finance is reviewing a list of 6,475 goods submitted to the secretariat in Accra, Ghana, before forwarding it to the Council of Ministers for approval, marking the initiation of the trial period. Nearly 90pc of items—are poised for zero tariffs, while seven percent are slated for tariff removal over a decade, with 193 goods excluded from preferential free trade.

According to Tages Mulugeta, head of international & regional integration at the Ministry, negotiations over the trade protocols for products have made progress.

"We'll soon be selecting the participating businesses," he said.

Ethiopia stands among the nine countries out of 47 that have yet to finalise the approval process within its government, following endorsement from Accra. The rest have commenced trial trading in select commodities such as meat products, flowers, honey, and powdered milk.

Experts like Martha Belete (PhD), a law professor and regional integration consultant, argue that fully benefiting from AfCFTA will require changes within domestic businesses. She points out limited access to finance, widespread corruption, low industrial productivity, and informal business practices as pressing issues that need to be addressed.

"Reliance on primary commodities for exports should also be reduced," she said.

Martha said potential impacts of Ethiopis's recent opening of retail, wholesale, import, and export sectors for foreign investors, call for nuanced approaches in how foreign capital engages in AfCFTA.

For Tages, the timeframe for joining depends on reaching agreements on the criteria to determine the national source of textile and automotive products. While the trade official is hopeful about Ethiopia's potential participation in the Pan African Payment & Settlement System (PAPSS), which is currently integrated into only six countries, a senior official from the National Bank of Ethiopia (NBE) emphasised the importance of conducting a thorough assessment of the agreement to understand the intricacies of other African economies.

"We can't blindly get into an agreement," he told Fortune.

Tages remains optimistic. He believes that without full integration, countries can engage in intracontinental trade through common currencies during the trial period. Managed by the African Export-Import Bank (Afrexim Bank), PAPSS is a two-year-old cross-border financial market infrastructure facilitating payment transactions across Africa.

Six years after the initial agreements, logistical disparities among member countries persist. Elizabeth Getahun, CEO of Panafric Global Logistics, expressed concerns about delayed port clearance and freight forwarding protocols. She noted that while countries like Kenya have made progress in integrating their logistics sectors with others, Ethiopia lags behind.