African Continental Free Trade Area

Not to be confused with African Free Trade Zone.

The African Continental Free Trade Area (AfCFTA)^[11] is a free trade area encompassing most of Africa.^[12][13][14] It was established in 2018 by the African Continental Free Trade Agreement, which has 43 parties and another 11 signatories, making it the largest free-trade area by number of member states, after the World Trade Organization,^[15] and the largest in population and geographic size, spanning 1.3 billion people across the world's second largest continent.

African Continental Free Trade Area

African Continental Free Trade Area logo Status as of August, 2024   Ratifying parties   Signed March 2018, not ratified   Signed July 2018 or later, not ratified
Type	Free-trade area
Signed	March 21, 2018
Location	Kigali, Rwanda
Effective	May 30, 2019; 5 years ago (May 30, 2019)[1]
Condition	Ratification by 22 states
Original signatories	44 states  Algeria  Angola  Burkina Faso  Cabo Verde  Cameroon  Central African Republic  Chad  Comoros  Côte d'Ivoire  Democratic Republic of Congo  Djibouti  Egypt  Equatorial Guinea  Eswatini  Ethiopia  Gabon  Gambia  Ghana  Guinea  Kenya  Liberia  Libya  Madagascar  Malawi  Mali  Mauritania  Mauritius  Morocco  Mozambique  Niger  Republic of Congo  Rwanda  Sahrawi Arab Democratic Republic  São Tomé and Príncipe  Senegal  Seychelles  Somalia  South Sudan  Sudan  Tanzania  Togo  Tunisia  Uganda  Zimbabwe
Signatories	10 additional states[2]  Benin  Botswana  Burundi  Guinea-Bissau  Lesotho  Namibia  Nigeria  Sierra Leone  South Africa  Zambia
Parties	48 states[3]  Algeria  Angola  Botswana  Burkina Faso  Burundi  Cabo Verde  Cameroon  Central African Republic  Chad  Comoros  Côte d'Ivoire  Democratic Republic of Congo  Djibouti  Egypt  Equatorial Guinea  Eswatini  Ethiopia  Gabon  Gambia  Ghana (May 10, 2018)[4]  Guinea  Guinea-Bissau  Kenya (May 10, 2018)[4]  Lesotho (November 2, 2020)[5]  Liberia  Malawi  Mali  Mauritania[6]  Mauritius  Morocco  Mozambique  Namibia  Nigeria  Niger  Republic of the Congo[7]  Rwanda  Sahrawi Arab Democratic Republic  São Tomé and Príncipe  Senegal  Seychelles  Sierra Leone  South Africa  Tanzania (17 January 2022)[8]  Togo (December 6, 2018)[9]  Tunisia (November 2, 2020)[5]  Uganda (November 29, 2018)[10]  Zambia  Zimbabwe
Depositary	African Union Commission
Languages	Arabic, English, French, Portuguese, Spanish, Swahili

The agreement founding AfCFTA was brokered by the African Union (AU) and signed by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018.^[16][17] The proposal was set to come into force 30 days after ratification by 22 of the signatory states.^[16] On April 29, 2019,^[18] the Sahrawi Republic made the 22nd deposit of instruments of ratification, bringing the agreement into force on May 30; it entered its operational phase following a summit on July 7, 2019,^[19] and officially commenced January 1, 2021. AfCFTA's negotiations and implementation are overseen by a permanent secretariat based in Accra, Ghana.^[20][21]

Under the agreement, AfCFTA members are committed to eliminating tariffs on most goods and services over a period of 5, 10, or 13 years, depending on the country's level of development or the nature of the products.^[20] General long-term objectives include creating a single, liberalised market; reducing barriers to capital and labor to facilitate investment; developing regional infrastructure; and establishing a continental customs union.^[22] The overall aims of AfCFTA are to increase socioeconomic development, reduce poverty, and make Africa more competitive in the global economy.

On January 13, 2022, the AfCFTA took a major step towards its objective with the establishment of the Pan-African Payment and Settlement System (PAPSS), which allows payments among companies operating in Africa to be done in any local currency.^[20]

In April 2024, the African Union announced that the AfCFTA entered into the operational phase of the agreement. The operational phase, which effectively puts the agreement into force, is characterized by the following actions:

• Establishment of the rules of origin, which will govern the conditions under which a product or service can be traded duty free;
• Tariff concessions, 90% tariff liberalisation;
• Online mechanism, allows members to report non-tariff barriers;
• Pan-African payment and settlement system, allows certainty of payments and will instill confidence in the system
• African Trade Observatory, a portal to address hindrances to trade, will be provided by AU member states.^[23]

History

Background

In 1963, the Organization of African Unity was founded by the independent states of Africa. The OAU aimed to promote cooperation between African states. In 1980 it adopted the Lagos Plan of Action. The plan suggested Africa should minimize its reliance upon the West by promoting intra-African trade. This began as the creation of a number of regional cooperation organizations in the different regions of Africa, such as the Southern African Development Coordination Conference. Eventually this led to the Abuja Treaty in 1991, which created the African Economic Community, an organization that promoted the development of free trade areas, customs unions, an African Central Bank, and an African common currency union.^[24][25]

In 2002, the OAU was succeeded by the African Union (AU), which had as one of its goals to accelerate the "economic integration of the continent".^[26] A second goal was to "coordinate and harmonize the policies between the existing and future Regional Economic Communities for the gradual attainment of the objectives of the Union."^[27]

Negotiations

At the 2012 African Union summit in Addis Ababa, leaders agreed to create a new Continental Free Trade Area by 2017. At the 2015 AU summit in Johannesburg, the summit agreed to commence negotiations. This began a series of ten negotiating sessions which took place over the next three years.^[24][28]

The first negotiation forum was held in February 2016 and held eight meetings until the Summit in March 2018 in Kigali. From February 2017 on the technical working groups held four meetings, where technical issues were discussed and implemented in the draft. On March 8–9, 2018 the African Union Ministers of Trade approved the draft.^[29]

2018 Kigali Summit

In March 2018, at the 10th Extraordinary Session of the African Union on AfCFTA, three separate agreements were signed: the African Continental Free Trade Agreement, the Kigali Declaration; and the Protocol on Free Movement of Persons. The Protocol on Free Movement of Persons seeks to establish a visa-free zone within the AfCFTA countries, and support the creation of the African Union Passport.^[30] At the summit in Kigali on March 21, 2018, 44 countries signed the AfCFTA, 47 signed the Kigali Declaration, and 30 signed the Protocol on Free Movement of People. While a success, there were two notable holdouts: Nigeria and South Africa, the two largest economies in Africa.^[31][32][33]

One complicating factor in the negotiations was that Africa had already been divided into eight separate free trade areas and/or customs unions, each with different regulations.^{[note 1]} These regional bodies will continue to exist; the African Continental Free Trade Agreement initially seeks to reduce trade barriers between the different pillars of the African Economic Community, and eventually use these regional organizations as building blocks for the ultimate goal of an Africa-wide customs union.^{[24][33][34][35]}

Declarations signed at the 2018 Kigali summit^[36]

Country	Signed By	AfCFTA Consolidated Text (signature)	Kigali Declaration	Free Movement Protocol
Algeria	Prime Minister Ahmed Ouyahia	Yes	Yes	No
Angola	President João Lourenço	Yes	Yes	Yes
Central African Republic	President Faustin Archange Touadéra	Yes	Yes	Yes
Chad	President Idriss Déby	Yes	Yes	Yes
Comoros	President Azali Assoumani	Yes	Yes	Yes
Djibouti	President Ismaïl Omar Guelleh	Yes	Yes	No
Equatorial Guinea	Prime Minister Francisco Pascual Obama Asue	Yes	Yes	Yes
Eswatini	Prime Minister Barnabas Sibusiso Dlamini	Yes	Yes	No
Gabon	President Ali Bongo Ondimba	Yes	Yes	Yes
Gambia	President Adama Barrow	Yes	Yes	Yes
Ghana	President Nana Akufo-Addo	Yes	Yes	Yes
Ivory Coast	Vice President Daniel Kablan Duncan	Yes	No	No
Kenya	President Uhuru Kenyatta	Yes	Yes	Yes
Lesotho	Prime Minister Tom Thabane	No	Yes	Yes
Mauritania	President Mohamed Ould Abdel Aziz	Yes	Yes	Yes
Morocco	Prime Minister Saadeddine Othmani	Yes	No	No
Mozambique	President Filipe Nyusi	Yes	Yes	Yes
Niger	President Mahamadou Issoufou	Yes	Yes	Yes
Republic of the Congo	President Denis Sassou Nguesso	Yes	Yes	Yes
Rwanda	President Paul Kagame	Yes	Yes	Yes
Sahrawi Arab Democratic Republic	President Brahim Ghali	Yes	Yes	No
Senegal	President Macky Sall	Yes	Yes	Yes
Seychelles	Vice President Vincent Meriton	Yes	Yes	No
South Africa	President Cyril Ramaphosa	No	Yes	No
Sudan	Prime Minister Abdalla Hamdok	Yes	Yes	Yes
Tanzania	Prime Minister Kassim Majaliwa	No	Yes	No
Uganda	President Yoweri Museveni[37]	Yes	Yes	Yes
Zimbabwe	President Emmerson Mnangagwa	Yes	Yes	No

Drafting of further protocols

Negotiations continued in 2018 with Phase II, including policies of investment, competition and intellectual property rights.^[38] In January 2020, AU Assembly negotiations are envisaged to be concluded.^[39] A draft is expected for the January 2020 AU Assembly.^{[40][needs update]}

Expectations

In 2018, the United Nations Economic Commission for Africa estimated that AfCFTA would boost intra-African trade by 52 percent by 2022.^[41] A 2020 report by the World Bank anticipated that AfCFTA could lift 30 million Africans out of extreme poverty, boost the incomes of nearly 70 million people, and generate $450 billion in income by 2035.^[42]

Institutions

The following institutions were established to facilitate the implementation of the free trade area. As a result of Phase II negotiations more committees may be established via protocols.^[43]

The AfCFTA Secretariat is responsible for coordinating the implementation of the agreement and is an autonomous body within the AU system. Though it has independent legal personality, it works closely with the AU Commission and receives its budget from the AU. The Council of Ministers responsible for trade was to decide on the location of the headquarter, structure, role and responsibilities.^[38] The Assembly of the African Union Heads of State and Government is the highest decision-making body. It is likely to meet during the AU Summits.^[44] The Council of Ministers Responsible for Trade provides strategic trade policy oversight and ensures effective implementation and enforcement of the AfCFTA Agreement.^[44]

Several committees have been established: for trade in goods, trade in services, on rules of origin, trade remedies, non-tariff barriers, technical barriers to trade and on sanitary and phytosanitary measures.^[44] Dispute resolution mechanisms^[45] and procedures are still being negotiated, but will presumably include designation of a dispute resolution body.^[38] The Committee of Senior Trade Officials implements the Council's decisions. The Committee is responsible for the development of programs and action plans for the implementation of the AfCFTA Agreement.^[44]

Implementation

The AfCFTA is set to be implemented in phases, and some of the future phases are still under negotiation.^[35] Phase I covers trade in goods and trade in services. Phase II covers intellectual property rights, investment and competition policy. Phase III covers e-commerce.

At the 2018 Kigali summit, areas of agreement were found on trade protocols, dispute settlement procedures, customs cooperation, trade facilitation, and rules of origin. There was also agreement to reduce tariffs on 90% of all goods. Each nation is permitted to exclude 3% of goods from this agreement.^[28] This was part of Phase I of the agreement, which covers goods and services liberalization. Some Phase I issues that remain to be negotiated include the schedule of tariff concessions and other specific commitments.^[28][35]

The 12th Extraordinary Session of the African Union on AfCFTA, called to launch the new agreement into its operational phase, was hosted in Niamey on July 7, 2019.^[46][47] At its launch, five operational instruments that will govern the AfCFTA were activated: "the rules of origin; the online negotiating forum; the monitoring and elimination of non-tariff barriers; a digital payment system; and the African Trade Observatory."^[48]

Phase II and III negotiations are expected to be initiated by all AU member countries and held in successive rounds. In February 2020, the AU Assembly of Heads of State and Government decided that Phase III would begin immediately following the conclusion of Phase II negotiations, which were initially scheduled to conclude in December 2020.^[28][35] However, this deadline was delayed due to the COVID-19 pandemic in Africa, and a new date (December 31, 2021) was set as the deadline for the conclusion of Phase II and III negotiations. The AfCFTA officially but largely symbolically launched on January 1, 2021.^[49]

Membership

Among the 55 AU member states, 44 signed the African Continental Free Trade Agreement (consolidated text), 47 signed the Kigali Declaration and 30 signed the Protocol on Free Movement of People at the end of the 2018 Kigali Summit. Benin, Botswana, Eritrea, Guinea-Bissau, Nigeria, and Zambia were among the 11 countries that did not initially sign the agreement.^[50] After the 2018 Kigali summit, more signatures were added to the AfCFTA. At the 31st African Union Summit in Nouakchott on 1 July 2018, South Africa (the second largest economy of Africa), Sierra Leone, Namibia, Lesotho and Burundi joined the agreement.^[51] In February 2019, Guinea-Bissau, Zambia and Botswana also joined. Kenya and Ghana were the first nations to ratify the agreement, depositing their ratification on 10 May 2018.^[4]

Of the signatories, 22 needed to deposit the instrument of ratification of the agreement for it to come into effect, and this occurred on April 29, 2019 when both Sierra Leone and the Sahrawi Arab Democratic Republic deposited the agreement.^[52] As a result, the agreement came into force 30 days later on May 30, 2019.

President of Nigeria Muhammadu Buhari was particularly reluctant to join the AfCFTA, fearing it would hurt Nigerian entrepreneurship and local industries,^[53] and his decision not to was praised by some local groups including the Manufacturers Association of Nigeria^[54] and the Nigeria Labour Congress.^[55] The Nigerian government intended to consult further with local businesses in order to ensure private sector buy-in to the agreement,^[56] because a key concern was whether the agreement adequately prevented anti-competitive practices such as dumping.^[57] In July 2019, just months after being re-elected to a new term, Buhari agreed to join the agreement at the 12th extraordinary session of the assembly of the union on AfCFTA.^[58]

At the same meeting, Benin also committed to signing the agreement, leaving Eritrea as the only one of the 55 African Union Member States not to sign up to the deal.^[59][60][47] Formally, Eritrea was not part of the initial agreement due to an ongoing state of war, but the 2018 peace agreement between Ethiopia and Eritrea ended the conflict and ended the barrier to Eritrean participation in the free trade agreement.^{[12][33][61][62][63][64][needs update]}

As of August 2024, there are 54 signatories, of which 48 have deposited their instruments of ratification.^[65][66][67] Additionally, one country (Somalia) completed its domestic ratification^[when?], but had not yet deposited their ratification with the depository by May 2020.^[67][68] Eritrea is the only AU member state which had not signed the agreement by 2019.^[61]

List of signatories and parties to the agreement

Ratification Status of African Nations^[69]

Country	Signed	Date of Signing	Ratified	Date of Ratification	Deposited	Date of Deposit
Algeria	Yes	March 21, 2018	Yes	June 7, 2021	Yes	June 23, 2021[70]
Angola	Yes	March 21, 2018	Yes	October 6, 2020	Yes	November 4, 2020[71]
Benin	Yes	July 7, 2019	No		No
Botswana	Yes	February 10, 2019	Yes		Yes	February 19, 2023
Burkina Faso	Yes	March 21, 2018	Yes	May 27, 2019	Yes	May 29, 2019[72]
Burundi	Yes	July 2, 2018	Yes	June 17, 2021	Yes	August 26, 2021
Cameroon	Yes	March 21, 2018	Yes	January 31, 2020	Yes	December 1, 2020
Central African Republic	Yes	March 21, 2018	Yes	April 9, 2020	Yes	September 22, 2020
Cape Verde	Yes	March 21, 2018	Yes	November 13, 2020	Yes	February 5, 2022
Chad	Yes	March 21, 2018	Yes	June 29, 2018	Yes	July 2, 2018[73]
Ivory Coast	Yes	March 21, 2018	Yes	November 13, 2018	Yes	November 23, 2018
Comoros	Yes	March 21, 2018	Yes		Yes	February 19, 2023
Republic of the Congo	Yes	March 21, 2018	Yes	February 7, 2019	Yes	February 10, 2019
Democratic Republic of the Congo	Yes	March 21, 2018	Yes	January 28, 2022	Yes	February 23, 2022
Djibouti	Yes	March 21, 2018	Yes	February 5, 2019	Yes	February 11, 2019
Egypt	Yes	March 21, 2018	Yes	February 27, 2019	Yes	April 8, 2019[74]
Equatorial Guinea	Yes	March 21, 2018	Yes	June 28, 2019	Yes	July 2, 2019[75]
Eritrea	No		No		No
Eswatini	Yes	March 21, 2018	Yes	June 21, 2018	Yes	July 2, 2018[73]
Ethiopia	Yes	March 21, 2018	Yes	March 23, 2019	Yes	April 10, 2019[76]
Gabon	Yes	March 21, 2018	Yes	July 2, 2019	Yes	July 7, 2019[75]
Gambia	Yes	March 21, 2018	Yes	April 11, 2019	Yes	April 16, 2019
Ghana	Yes	March 21, 2018	Yes	May 7, 2018	Yes	May 10, 2018[77]
Guinea	Yes	March 21, 2018	Yes	July 31, 2018	Yes	October 16, 2018
Guinea-Bissau	Yes	February 8, 2019	Yes	August 31, 2022[78]	Yes	August 31, 2022
Kenya	Yes	March 21, 2018	Yes	May 6, 2018	Yes	May 10, 2018[77]
Lesotho	Yes	July 2, 2018	Yes	October 20, 2020	Yes	November 27, 2020
Liberia	Yes	March 21, 2018	Yes	July 1, 2023[79]	Yes	July 31, 2024[citation needed]
Libya	Yes	March 21, 2018	No		No
Madagascar	Yes	March 21, 2018	No		No
Malawi	Yes	March 21, 2018	Yes	November 1, 2020[80]	Yes	January 15, 2021[81]
Mali	Yes	March 21, 2018	Yes	January 11, 2019	Yes	February 1, 2019
Mauritania	Yes	March 21, 2018	Yes	January 31, 2019	Yes	February 11, 2019[82]
Mauritius	Yes	March 21, 2018	Yes	September 30, 2019	Yes	October 7, 2019
Morocco	Yes	March 21, 2018	Yes	February 24, 2022	Yes	April 18, 2022
Mozambique	Yes	March 21, 2018	Yes	January 9, 2023[83]	Yes	July 5, 2023
Namibia	Yes	July 2, 2018	Yes	January 25, 2019	Yes	February 1, 2019
Niger	Yes	March 21, 2018	Yes	May 28, 2018	Yes	June 19, 2018[84]
Nigeria	Yes	July 7, 2019	Yes	December 3, 2020[85]	Yes	December 5, 2020[86]
Rwanda	Yes	March 21, 2018	Yes	May 25, 2018	Yes	May 26, 2018[87]
Sahrawi Arab Democratic Republic	Yes	March 21, 2018	Yes	April 27, 2019	Yes	April 30, 2019
São Tomé and Príncipe	Yes	March 21, 2018	Yes	May 28, 2019	Yes	June 27, 2019[88]
Senegal	Yes	March 21, 2018	Yes	March 12, 2019	Yes	April 2, 2019
Seychelles	Yes	March 21, 2018	Yes	July 8, 2021	Yes	September 15, 2021
Sierra Leone	Yes	July 2, 2018	Yes	April 19, 2019	Yes	April 30, 2019
Somalia	Yes	March 21, 2018	Yes		No
South Africa	Yes	July 2, 2018	Yes	January 31, 2019	Yes	February 10, 2019[89]
South Sudan	Yes	March 21, 2018	No		No
Sudan	Yes	March 21, 2018	No		No
Tanzania	Yes	March 21, 2018	Yes	January 17, 2022	Yes	January 17, 2022[8]
Togo	Yes	March 21, 2018	Yes	January 9, 2019	Yes	April 2, 2019
Tunisia	Yes	March 21, 2018	Yes	September 7, 2020	Yes	November 27, 2020
Uganda	Yes	March 21, 2018	Yes	November 20, 2018	Yes	February 9, 2019[90]
Zambia	Yes	February 10, 2019	Yes	January 28, 2021[91]	Yes	February 5, 2021[92]
Zimbabwe	Yes	March 21, 2018	Yes	April 25, 2019	Yes	May 24, 2019[93]

Other AU member states

Eritrea has not signed due to tensions with Ethiopia, but as of 2019, following the 2018 Eritrea–Ethiopia summit, the AU Commissioner for Trade and Industry expected that Eritrea would eventually sign the agreement.^{[61][needs update]}

Human rights assessment

A July 2017 United Nations Economic Commission for Africa report argues that the CFTA may contribute to tackling poverty and inequality as its wide scope will facilitate structural changes in African economies. It is seen as a step towards meeting the African Union’s Agenda 2063 and the Sustainable Development Goals. The document was targeted to ensuring human rights were considered within the negotiations.^[94][95]

According to the Food and Agriculture Organization, recognizing the intersections of gender, agriculture, and trade, it is critical to ensure that the implementation of the AfCFTA addresses the nuanced and varied challenges that women face.^[96] It is vital that the operationalization of the AfCFTA agreement ensures that future trade policies, practices, and regulations promote gender equality and the empowerment of women and girls on the African continent, especially in supporting women to seize the new opportunities created ‘in agriculture’ by the AfCFTA.^[96] Implementation of the agreement that is not inclusive of women could result in a widening gender gap by negatively affecting women-led micro, small, or medium-sized enterprises and those who rely on informal trade (including cross border) for their livelihoods.^[96]

See also

• AfCFTA Dispute Settlement Mechanism
• ASEAN Free Trade Area
• Caribbean Community (CARICOM)
  • CARICOM Single Market and Economy
• Central European Free Trade Agreement
• Common Market for Eastern and Southern Africa
• Commonwealth of Independent States Free Trade Area
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership
• Council of Arab Economic Unity
• Free trade agreement
• Free-trade area
• Free trade areas in Europe
• Market access
• Single African Air Transport Market
• Rules of Origin
• Tariffs
• Tourism in Africa
• Tripartite Free Trade Area

Notes

1. There are eight Regional Economic Communities recognised by the African Union, each established under a separate regional treaty.

   • Arab Maghreb Union (UMA)
   • Common Market for Eastern and Southern Africa (COMESA)
   • Community of Sahel-Saharan States (CEN-SAD)
   • East African Community (EAC)
   • Economic Community of Central African States (ECCAS)
   • Economic Community of West African States (ECOWAS)
   • Intergovernmental Authority on Development (IGAD)
   • Southern African Development Community (SADC)

Source

 This article incorporates text from a free content work. Licensed under CC BY-SA 3.0 (license statement/permission). Text taken from Seizing the opportunities of the African Continental Free Trade Area for the economic empowerment of women in agriculture​, FAO, FAO.

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External links

• Official website
• UNCTAD support to the African Continental Free Trade Area (AfCFTA)
• African Continental Free Trade Area (AfCFTA) page on the Rules of Origin Facilitator, with member countries' status and access to legal documents.