The African Continental Free Trade Area (AfCFTA) is a free trade area encompassing most of Africa. It was established in 2018 by the African Continental Free Trade Agreement, with 43 parties and 11 additional signatories, making it:
- The largest free-trade area by number of member states after the WTO.
- The largest in population and geographic size, covering 1.3 billion people across Africa.
The AfCFTA was brokered by the African Union (AU) and signed by 44 of 55 AU member states on March 21, 2018, in Kigali, Rwanda. It officially entered into force on May 30, 2019, and commenced on January 1, 2021. Its implementation is overseen by a permanent Secretariat based in Accra, Ghana.
Objectives
AfCFTA members aim to:
- Eliminate tariffs on most goods and services within 5, 10, or 13 years.
- Create a single, liberalised market.
- Reduce barriers to capital and labor.
- Facilitate investment and infrastructure development.
- Establish a continental customs union.
Ultimate Goals:
- Increase socioeconomic development
- Reduce poverty
- Boost Africa’s competitiveness globally
Major Milestones
Pan-African Payment and Settlement System (PAPSS)
- Launched: January 13, 2022
- Purpose: Enables cross-border payments in local currencies.
Operational Phase (April 2024)
Key features: - Rules of origin: Define duty-free trade eligibility - 90% tariff liberalisation - Online platform: For non-tariff barrier reporting - PAPSS: Provides payment certainty - African Trade Observatory: Monitors trade performance
History
Background
- 1963: Organization of African Unity (OAU) founded
- 1980: Lagos Plan of Action promotes intra-African trade
- 1991: Abuja Treaty creates the African Economic Community
- 2002: OAU replaced by African Union (AU)
Negotiations
- 2012 AU Summit (Addis Ababa): Agreement to create AfCFTA by 2017
- 2015 AU Summit (Johannesburg): Negotiation phase begins
- 2016–2018: Ten negotiation rounds; technical drafts completed by March 2018
2018 Kigali Summit
Three agreements signed: 1. AfCFTA Agreement 2. Kigali Declaration 3. Protocol on Free Movement of Persons
- 44 countries signed AfCFTA
- 47 signed the Kigali Declaration
- 30 signed the Protocol on Free Movement
Notable holdouts at the time: Nigeria and South Africa
Drafting of Further Protocols
- Phase II (2018): Investment, competition, and IP rights
- January 2020: Drafts to be presented at AU Assembly
Expectations
- UNECA (2018): Predicted a 52% boost in intra-African trade by 2022
- World Bank (2020):
- Lift 30 million people from extreme poverty
- Boost incomes for 70 million
- Add $450 billion to African income by 2035
Institutions
AfCFTA Secretariat
- Coordinates implementation
- Autonomous within the AU system
- Receives funding from the AU
Key Bodies
- Assembly of the AU Heads of State and Government
- Council of Ministers Responsible for Trade
- Committee of Senior Trade Officials
Specialized Committees
- Trade in goods
- Trade in services
- Rules of origin
- Trade remedies
- Non-tariff barriers
- Technical and sanitary measures
Implementation Phases
Phase I
- Trade in goods & services
- Agreement on protocols, dispute resolution, customs cooperation, etc.
- Tariff reduction on 90% of goods (3% exclusions allowed)
Phase II
- Investment
- Intellectual property rights
- Competition policy
Phase III
- E-commerce
July 7, 2019 (Niamey Summit)
Launch of 5 operational tools:
1. Rules of origin
2. Online negotiation forum
3. Monitoring non-tariff barriers
4. Digital payment system
5. African Trade Observatory
Delays
- Phase II & III delayed by COVID-19
- New deadline: December 31, 2021
- Symbolic launch: January 1, 2021
Membership
Initial Signatories (2018)
- 44 AU member states signed AfCFTA
- 47 signed Kigali Declaration
- 30 signed Free Movement Protocol
Late Joiners
- South Africa, Namibia, Burundi, Lesotho, Sierra Leone (July 2018)
- Botswana, Guinea-Bissau, Zambia (February 2019)
Ratification
- First ratifiers: Kenya and Ghana (May 10, 2018)
- Threshold met: April 29, 2019 (Sierra Leone & Sahrawi Republic)
- In force: May 30, 2019
Nigeria’s Delay
- Concerns over local industry and anti-dumping enforcement
- Signed: July 2019 after consultations
Eritrea
- Not signed as of 2019 due to past conflict with Ethiopia
- Expected to join post-2018 peace agreement
Status (as of August 2024)
- 54 signatories
- 48 ratifications deposited
- 1 completed domestic ratification (Somalia)
- 1 non-signatory: Eritrea
See Also
- African Union
- Lagos Plan of Action
- Abuja Treaty
- Pan-African Payment and Settlement System
- African Trade Observatory
Sources
This article incorporates text from a free content work licensed under CC BY-SA 3.0:
Seizing the opportunities of the African Continental Free Trade Area for the economic empowerment of women in agriculture, FAO
External Links
- Official AfCFTA Website(https://afcfta.au.int)
- UNCTAD AfCFTA Support(https://unctad.org)
- AfCFTA - Rules of Origin Facilitator(https://findrulesoforigin.org)