TheAfrican Continental Free Trade Area (AfCFTA)[11] is afree trade area encompassing most ofAfrica.[12][13][14] It was established in 2018 by theAfrican Continental Free Trade Agreement, which has 43 parties and another 11 signatories, making it the largestfree-trade area by number of member states, after theWorld 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 theAfrican Union (AU) and signed by 44 of its 55 member states inKigali,Rwanda on March 21, 2018.[16][17] The proposal was set to come into force 30 days afterratification by 22 of the signatory states.[16] On April 29, 2019,[18] theSahrawi 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 inAccra,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 asingle, liberalised market; reducing barriers to capital and labor to facilitate investment; developing regional infrastructure; and establishing a continentalcustoms union.[22] The overall aims of AfCFTA are to increase socioeconomic development, reduce poverty, and make Africa more competitive in theglobal economy.
On January 13, 2022, the AfCFTA took a major step towards its objective with the establishment of thePan-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:
In 1963, theOrganization of African Unity was founded by the independent states of Africa. TheOAU aimed to promote cooperation between African states. In 1980 it adopted theLagos 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 theSouthern African Development Coordination Conference. Eventually this led to theAbuja Treaty in 1991, which created theAfrican Economic Community, an organization that promoted the development of free trade areas, customs unions, an African Central Bank, and anAfrican common currency union.[24][25]
In 2002, the OAU was succeeded by theAfrican 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]
At the 2012 African Union summit inAddis Ababa, leaders agreed to create a new Continental Free Trade Area by 2017. At the 2015 AU summit inJohannesburg, 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]
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, theKigali DeclarationArchived October 8, 2023, at theWayback Machine; and theProtocol on Free Movement of PersonsArchived March 13, 2020, at theWayback Machine. The Protocol on Free Movement of Persons seeks to establish a visa-free zone within the AfCFTA countries, and support the creation of theAfrican Union Passport.[30] At the summit inKigali 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 andSouth Africa, the two largest economies in Africa.[31][32][33]
One complicating factor in the negotiations was that Africa had already been divided intoeight 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]
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]
In 2018, theUnited 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]
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, onrules 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]
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 coversintellectual property rights,investment andcompetition policy. Phase III coverse-commerce.
At the 2018 Kigali summit, areas of agreement were found on trade protocols, dispute settlement procedures, customs cooperation, trade facilitation, andrules 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 oftariff 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 inNiamey on July 7, 2019.[46][47] At its launch, five operational instruments that will govern the AfCFTA were activated: "therules of origin; the online negotiating forum; the monitoring and elimination of non-tariff barriers; adigital 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 theCOVID-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]
Among the 55AU 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, andZambia 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 inNouakchott on 1 July 2018,South Africa (the second largest economy of Africa),Sierra Leone,Namibia,Lesotho andBurundi joined the agreement.[51] In February 2019,Guinea-Bissau,Zambia andBotswana also joined. Kenya and Ghana were the first nations to ratify the agreement, depositing their ratification on 10 May 2018.[3]
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 NigeriaMuhammadu 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 theManufacturers Association of Nigeria[54] and theNigeria Labour Congress.[55] TheNigerian 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 asdumping.[57] In July 2019, just months after beingre-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 anongoing state of war, but the2018 peace agreement betweenEthiopia 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]
| 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[80] |
 Libya | Yes | March 21, 2018 | No | No | ||
 Madagascar | Yes | March 21, 2018 | No | No | ||
 Malawi | Yes | March 21, 2018 | Yes | November 1, 2020[81] | Yes | January 15, 2021[82] |
 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[83] |
 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[84] | 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[85] |
 Nigeria | Yes | July 7, 2019 | Yes | December 3, 2020[86] | Yes | December 5, 2020[87] |
 Rwanda | Yes | March 21, 2018 | Yes | May 25, 2018 | Yes | May 26, 2018[88] |
 Sahrawi 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[89] |
 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[90] |
 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[7] |
 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[91] |
 Zambia | Yes | February 10, 2019 | Yes | January 28, 2021[92] | Yes | February 5, 2021[93] |
 Zimbabwe | Yes | March 21, 2018 | Yes | April 25, 2019 | Yes | May 24, 2019[94] |
Eritrea has not signed due to tensions with Ethiopia, but as of 2019, following the2018 Eritrea–Ethiopia summit, the AU Commissioner for Trade and Industry expected that Eritrea would eventually sign the agreement.[61][needs update]
Some editorial and political discourse has been made about theAfrican diaspora and specifically the potential level of engagement which could be garnered between the African continent and the Caribbean region.[95][96][97] Many Caribbean nations have sought to deepen ties with nations in the continent ofAfrica. Leading to the African Union-bloc referring to the Caribbean as the potential "Sixth Region" of theAfrican Union under the protocol on the amendment to theConstitutive Act of 2003.[98][99] Some Caribbean states have already moved to join Africa institutions including Barbados, Grenada, Guyana, and The Bahamas which have all become members of the African Export-Import Bank.[100] And the Caribbean Development Bank has signed a cooperation strategic partnership agreement with the African Development Bank (AfDB).[101] In 2022 the former President of Jamaica even made calls for Caribbean States to seek partnership with the AfCFTA agreement.[102]At present Antigua and Barbuda, Barbados, Jamaica, Guyana, and Suriname are at various stages of establishing direct air flights with Africa to boost person-to-person links and boost trade, or tourism between both regions. Several Caribbean islands have also looked to open negotiations on easing passport visa restrictions between both regions.[103][104]
The first inter-regional Africa-Caribbean Community (CARICOM) Summit took place in September 2021. In August 2023 the African Union'sAfrican Export–Import Bank officially launched its first Caribbean Community office in Barbados beginning the process of integrating willing Caribbean states as the 6th region of the African Union.[105][106] The Government of Barbados donated the land in order to help complete the deal.[107] In 2023 the CARICOM-bloc's central banks voted to choose the African PAPSS-system as the preferred method for clearing inter-regional transactions.[108]
This article incorporates text from afree content work. Licensed under CC BY-SA 3.0 (license statement/permission). Text taken fromSeizing the opportunities of the African Continental Free Trade Area for the economic empowerment of women in agriculture, FAO, FAO.
Article 3c: "accelerate the political and socio-economic integration of the continent;"
Article 3 (l): "coordinate and harmonize the policies between the existing and future Regional Economic Communities for the gradual attainment of the objectives of the Union;"
A combined Afro-Caribbean trade bloc would represent over 1.6 billion consumers, significantly enhancing bargaining power at the WTO, UNCTAD, IMF, and during global climate finance negotiations.
Concerning the AU, the African Continental Free Trade Area (AfCFTA) provides a powerful unified market. CARICOM countries, though not members, can be involved through observer mechanisms or propose CARICOM-AfCFTA cooperation dialogues on trade facilitation, services, and investment.
African Union 6th Region Diaspora Headquarters to be established in Accompong, Jamaican -- African Union Permanent Ambassador to the USA, Hon. Dr. Arikana Chihombori Quao, has re-affirmed the decision to establish an African Union Diaspora Headquarters in Accompong Jamaica during the official ceremony to mark the anniversary of the signing of the Peace Treaty between the Accompong Maroons and the British.
Specifically, Patterson, who for many years had lead responsibility for trade issues for the 15-member Caribbean Community, Caricom, wants the regional trade bloc to take the lead in forging greater economic and financial ties with the ancestral motherland of the majority of the population of member countries of the integration movement, through a possible deal with the African Continental Free Trade Area, AfCFTA, which is being forged by African leaders.
Antigua and Barbuda's Prime Minister Gaston Browne has announced that leaders at the recent Africa–Caribbean Summit in Addis Ababa have agreed to introduce visa-free travel between Africa and the Caribbean.
St Vincent Prime Minister Ralph Gonsalves has passionately advocated for visa-free travel between African and Caribbean nations, marking a significant step towards strengthening historical and cultural bonds between the two regions. Speaking at a landmark gathering in Shashemene, Ethiopia, Gonsalves highlighted the transformative potential of removing travel restrictions. Drawing from his 2005 visit to Ethiopia, he emphasized the importance of expanding visa-free policies beyond bilateral agreements, envisioning a broader continental and regional approach.
The Pan-African Payment and Settlement System (PAPSS), a groundbreaking initiative developed by the African Export-Import Bank (Afreximbank) to revolutionize cross-border payments and boost intra-African trade, today celebrates a significant milestone as it receives a historic endorsement from the Governors of the Central Banks in the Caribbean region. All eleven Central Banks have unanimously adopted PAPSS as the preferred system for processing the settlement of intra-regional trade transactions.
