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.
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 Saharawi 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 its 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 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]
- ^ SARS (South African Revenue Service). 2021. Agreement Establishing the African Continental Free Trade AREA (AfCFTA). AfCFTA. https://www.sars.gov.za/legal-counsel/international-treaties-agreements/trade-agreements/afcfta/ Date of access: 14 Oct. 2021
- ^ "Summary of the key decisions and declarations of the 31st African Union Summit". African Union. July 6, 2018. Retrieved September 17, 2019.
- ^ a b Cite error: The named reference
FirstRatificationsKenyaGhanawas invoked but never defined (see the help page). - ^ a b "Tunisia and Lesotho join growing number of countries to ratify AfCFTA one month to start of trading". United Nations Economic Commission for Africa. November 30, 2020.[permanent dead link]
- ^ "Africa's Single Market To Come Into Force In July 2019". KT Press. Retrieved January 14, 2019.
- ^ Dahir, Abdi Latif (December 26, 2018). "Africa moved the world closer to its largest free trade area since WTO in 2018". Quartz Africa.
- ^ Tanzania Embassy in Ethiopia [@tanzaniainaddis] (January 17, 2022). "Ambassador deposits instrument of accession" (Tweet). Addis Ababa. Retrieved January 26, 2022 – via Twitter.
- ^ First, Togo. "Togo ratifies law to create African Continental Free Trade Area". www.togofirst.com.
- ^ a b "Uganda officially joins the Africa free trade deal, over 20 countries on the fence". November 29, 2018.
- ^ "Status of AfCFTA Ratification". tralac.org. August 2024.
- ^ Loes Witschge (March 20, 2018). "African Continental Free Trade Area: What you need to know". Al Jazeera.
- ^ "African states agree massive trade bloc". BBC News. March 21, 2018. Retrieved March 21, 2018.
- ^ "Africa Set to Agree $3 Trillion Trade Bloc, Without Key Economy". Bloomberg.com. March 21, 2018. Retrieved March 21, 2018.
- ^ AfricaNews. "Forty-four countries sign historic African Union free trade agreement | Africanews". Africanews. Retrieved March 21, 2018.
- ^ Justina Crabtree (March 20, 2018). "Africa is on the verge of forming the largest free trade area since the World Trade Organization". CNBC.
- ^ a b Cite error: The named reference
econwas invoked but never defined (see the help page). - ^ "44 African nations sign pact establishing free trade area". Arab News. March 21, 2018. Retrieved April 7, 2019.
- ^ Abdi Latif Dahir (April 3, 2019). "Africa's historic free trade deal now has enough countries signed up to go into force". Quartz Africa.
- ^ "AfCFTA Agreement secures minimum threshold of 22 ratification as Sierra Leone and the Saharawi Republic deposit instruments". African Union. April 29, 2019.
- ^ a b c U.S. International Trade Administration, African Continental Free Trade Area (3 January 2022).
- ^ "Akufo-Addo commissions and hands-over AfCFTA secretariat to AU commission". Joy online. August 17, 2020. Retrieved December 2, 2020.
- ^ "Agreement Establishing the African Continental Free Trade Area".
- ^ "Operational Phase Of The African Continental Free Trade Area Launched". African Union. Retrieved April 9, 2024.