Making the single African market work for you.
About the AfCFTA
The African Continental Free Trade Area (AfCFTA) is the world’s biggest trade area in terms of area and population size. Once fully ratified, it will encompass 55 countries and more than 1.6bn people. Its key objective is to increase intra-African trade by eliminating trade barriers.
Background on the AfCFTA
In 2012, the African Union (AU) voted to establish a continent-wide free trade area, aimed at boosting intra-African trade. All AU members were invited to participate in the subsequent negotiations, culminating in an agreement to establish the African Continental Free Trade Area being signed at the AU Assembly on 21 March 2018 in Kigali, Rwanda. The AfCFTA came into force on 30 May 2019. The agreement seeks to create a single continental market for goods and services, enabling the free movement of businesspeople and investments in Africa. The AfCFTA aims to expand intra-Africa trade across regional economic communities and the continent, while enhancing competitiveness, supporting economic transformation and promoting industrial development.
Negotiation phases
The AfCFTA negotiations take place in phases. In Phase I, protocols on the trade in goods, the trade in services and the settlement of disputes were concluded. In a second phase of negotiations, the AU adopts protocols on investment, intellectual property rights and competition policy. Protocols on digital trade and the promotion of women and young people in the AfCFTA trade were added in February 2024. Thanks to the AfCFTA, there will be a progressive liberalisation of intra-Africa tariffs on the trade in goods. Schedules of tariff concessions and rules of origin, which form an integral part of the Protocol on Trade in Goods, are yet to be finalised.
Trade in Goods
Trade in goods tariff negotiations: The Protocol on Trade in Goods came into force on 30 May 2019, at the same time as the agreement establishing the AfCFTA. However, negotiations on some rules of origin and schedules of tariff concessions are ongoing. The AfCFTA will see the progressive liberalisation of 97% of intra-Africa tariffs. Of these, 7% are categorised as sensitive products and will be liberalised over a longer time frame than the 90% of tariff lines listed in Category A. The remaining 3% of tariffs may be excluded from tariff liberalisation due to issues relating to food security, national security, fiscal revenue, livelihoods and industrialisation.
Trade in Services
Trade in services has the potential to be a game-changer in boosting economic growth and development, job creation, productivity and competitiveness across Africa, while deepening integration. For this reason, the trade in services forms a major component of the AfCFTA. In terms of the agreement, state parties will work to create a single liberalised market for trade in services, guided by the AfCFTA Protocol on Trade in Services (which came into effect on 30 May 2019). The protocol aims to boost intra-African trade in services based on the four supply modes of cross-border supply, consumption abroad, commercial presence, and the temporary movement of natural persons. By setting out market access commitments and regulatory frameworks for each sector, the protocol seeks to liberalise services trade in Africa.
One African Market
Understanding the immense benefit a single market could have for communities across Africa.
To implement a free trade area (FTA), rules of origin and a tariff phase-down schedule are required. Rules of origin refer to the legal provisions that determine the economic nationality of a product in the context of international trade – and, hence, its eligibility for preferential tariff treatment in a free trade area. They should only be used to reduce trade deflection and to create a conducive environment for trade between FTA members in originating goods.
AfCFTA negotiations on tariffs and rules of origin are still under way. The rules of origin that have been agreed on currently cover 92.3% of tariff lines, and trade in these goods can take place subject to the agreed modalities for tariff negotiations. Among the AfCFTA rules of origin is the “wholly obtained” rule for agricultural and other primary products. Product-specific rules have also been agreed on to encourage local value addition and the transformation of inputs.
The AfCFTA Secretariat’s proposed Guided Trade Initiative (GTI), presented at the 9th Meeting of the AfCFTA Council of Ministers on 25 and 26 July 2022, is a pilot project that is in effect while the outstanding negotiations on tariff concessions and rules of origin continue. Once these negotiations are complete, trade under the AfCFTA can begin. The objectives of the GTI are to:
The GTI was launched in Accra, Ghana, on 7 October 2022, with seven state parties: Ghana, Kenya, Rwanda, Tanzania, Mauritius, Egypt and Cameroon. States whose Provisional Schedules of Tariff Concessions have been verified may join the GTI, and products can be included if their rules of origin have been finalised.
Regional Economic Communities & the AfCFTA
According to Article 5 of the AfCFTA agreement, free trade areas in regional economic communities (RECs) are the building blocks of the AfCFTA, and must therefore be preserved. Article 19 (2) states that state parties that are already members of other RECs, regional trading arrangements and customs unions should maintain their existing levels of regional integration. This means that AU-recognised free trade areas in RECs, as well as other trading arrangements such as the Southern African Customs Union and the Tripartite Free Trade Area, will remain in place. The RECs will still implement their own regional trade agendas, and existing regional trading arrangements (such as a free trade area or customs union) will continue alongside the AfCFTA.
Women and Youth Protocol
The AfCFTA Protocol on Women and Youth in Trade aims to enhance the involvement of women and young people within the continental free trade area. It focuses on affirmative action, eliminating discrimination, promoting equality and fostering inclusiveness. The protocol outlines how state parties can contribute towards facilitating trade for African women and youth, including increasing their access to finance, enabling digital trade, building their capacity and protecting them against harassment.
FAQ
The AfCFTA is a project of the African Union aimed at creating an integrated market for goods, services, and capital across Africa, promoting sustainable and inclusive development.
The AfCFTA addresses challenges of inadequate infrastructure and regulatory barriers, promoting economic diversification and regional integration to unlock Africa’s economic potential.
The AfCFTA Agreement entered into force on May 30, 2019, with trading commencing January 1, 2021.
Negotiations began in 2015, covering trade in goods and services, with the agreement entering into force in May 2019. The operational phase commenced on January 1, 2021.
As of December 2022, 54 out of 55 AU member states have signed the agreement, with Eritrea being the only member yet to sign.
The legal framework includes protocols on trade in goods, services, investment, intellectual property rights, and competition policy.
The AfCFTA is expected to boost intra-African trade, promote industrialisation, and drive economic diversification, leading to shared prosperity and development.
The dispute resolution mechanism allows State Parties to file claims, promoting peaceful resolution of trade disputes.
Implementation challenges include income inequality, inadequate infrastructure, and technological barriers, among others.
Operational instruments include rules of origin, tariff concessions, and mechanisms for monitoring and eliminating non-tariff barriers, aimed at enhancing trade efficiency.
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