The African Continental Free Trade Area

The African Continental Free Trade Area (AfCFTA) is one of the Flagship Projects of Agenda 2063 Africa’s development framework. The AfCFTA was approved by the 18^th ordinary Session of Assembly of Heads of State and Government, held in Addis Ababa, Ethiopia in January 2012 which adopted the decision to establish an African Continental Free Trade Area and the Action Plan for Boosting intra-African trade as a key initiatives whose implementation would promote socio-economic growth development . The AfCFTA aims at accelerating intra-African trade and boosting Africa’s trading position in the global market by strengthening Africa’s common voice and policy space in global trade negotiations.

The objectives of the AfCFTA are to:

• Create a single market for goods, services, facilitated by movement of persons in order to deepen the economic integration of the African continent and in accordance with the Pan African Vision of “An integrated, prosperous and peaceful Africa” enshrined in Agenda 2063;
• Create a liberalised market for goods and services through successive rounds of negotiations;
• Contribute to the movement of capital and natural resources and facilitate investments building on the initiatives and developments being undertaken by the State Parties and RECs;
• Lay the foundation for the establishment of a Continental Customs Union at a later stage;
• Promote and attain sustainable and inclusive socio-economic development, gender equality and structural transformation of the State Parties;
• Enhance the competitiveness of the economies of State Parties within the continent and the global market;
• Promote industrial development through diversification and regional value chain development, agricultural development and food security;
• Resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes

The Agreement establishing the AfCFTA was signed on 21^st March in Kigali, Rwanda. The AfCFTA entered into force on 30th May 2019 and the Operational Instruments  governing trade under the AFCFTA regime were launched in Niamey, Niger in July 2019. Trading under the AfCFTA regime commenced on 1^st January 2021.

Protocols to the Agreement Establishing the AfCFTA include:

• The Protocol on Trade in Goods
• The Protocol on Trade in Services
• The Protocol on Rules & Procedure on  the settlement of disputes
• The Protocol Investment.
• The Protocol on Intellectual Property Rights
• The Protocol Competition Policy,

THE OPERATIONAL INSTRUMENTS OF THE AFCFTA

[1] The Rules of Origin: A regime governing the conditions under which a product or service can be traded duty free across the region

[2] The Tariff concessions: : It has been agreed that there should be 90% tariff liberalisation. Over a 10 year period with a 5 year transition, there will be an additional 7 % for “sensitive products" that must be liberalised. This will be supported by  the AfCFTA Trade in Goods online portal where Member States will upload their tariff offers covering 90% of the tariff lines.

• The AfCFTA Online Negotiation Tool will
  • Facilitate the negotiations on tariff liberalisation between State Parties, Customs Unions or Regional Groupings under the AfCFTA;
  • Provide tools to ensure the technical quality of the offers made;
  • Increase transparency while safeguarding confidentiality; and
  • Provide tools for users/negotiating groups to interact.

[3] The Continental Online Tool/Mechanism for monitoring, reporting and elimination of Non-tariff Barriers (NTBs):  The Continental tool will ensure NTBs are monitored with a view to ensuring they are eliminated

[4] The Pan-African Payments and Settlement System (PAPSS): Is a centralised payment and settlement infrastructure for intra-African trade and commerce payments. This project is being developed in collaboration with the African Export-Import Bank, Afreximbank which will facilitate payments as well as formalise some of the unrecorded trade due to prevalence of informal cross-border trade in Africa

[5] The African Trade Observatory:  A trade information portal that will address hindrances to trade in Africa due to lack of information about opportunities, trade statistics as well as information about exporters and importers in countries

The coordination and implementation of the AfCFTA is undertaken by the AfCFTA Secretariat which is based in based in Accra, Ghana. The Secretariat is responsible for convening meetings, monitoring and evaluating the implementation process and other duties assigned to it by the Committee of Senior Officials, Council of Ministers, and the Assembly.
 

Institutional Framework of the AfCFTA

The Assembly

The Assembly, is the highest decision-making organ of the AU, and which has exclusive authority to adopt interpretations of the AfCFTA Agreement on the recommendation of the Council of Ministers. The decision to adopt an interpretation is taken by consensus.

The Council of Ministers

The Council of Ministers comprises Ministers for Trade or such other ministers, authorities, or officials duly designated by the State Parties. It takes decisions on all matters under the AfCFTA Agreement, and reports to the Assembly through the Executive Council of the AU. The AfCFTA Council of Ministers is separate from the AU Ministers of Trade (AMOT)

The Council of Ministers meet twice a year in an ordinary session and may meet as and when necessary in extraordinary sessions.

Decisions taken by the Council of Ministers, are binding on State Parties. Decisions that have legal, structural or financial implications shall be binding on State Parties upon their adoption by the Assembly.
 

The Committee of Senior Trade Officials

The Committee of Senior Trade Officials comprises Permanent or Principal Secretaries or other officials designated by State Parties. It is responsible for the development of programmes and action plans for the implementation of the AfCFTA Agreement.

The committee monitors, constantly reviews and ensures proper functioning and development of the AfCFTA in accordance with the provisions of the Agreement;

Subject to directions given by the Council of Ministers, the Committee of Senior Trade Officials shall meet at least twice a year and shall operate in accordance with the rules of procedures as adopted by the Council of Ministers. The Committee shall submit its report, which may include recommendations, to the Council of Ministers following its meetings.

The RECs are represented in the Committee of Senior Trade Officials, in an advisory capacity.

Technical Committees: The Protocols of the AfCFTA Agreement establish various technical committees to assist with the implementation of the Agreement. They include the Trade in Goods Committee and Trade in Services Committee.

Click here for Agreement Establishing the African Continental Free Trade Area

Click here for more