bilaterals.org logo
bilaterals.org logo

AfCFTA

The African Continental Free Trade Area (AfCFTA) is a trade agreement that aims to create a vast free trade area for over 1.3 billion people with a combined GDP of over US$ 3.4 trillion.

The idea of creating an Africa-wide free trade area emerged at the 2012 African Union (AU) summit in Addis Ababa. Negotiations began in 2015 and the deal was signed by 44 of the 55 AU member states in March 2018, during the AU summit in Kigali. While the agreement has been operational since May 2019, some of its trade rules have only been implemented since October 2022 and between just seven states.

The AfCFTA aims to liberalize 97% of products, 90% of non-sensitive products followed by 7% of sensitive products. Phase 1 of the negotiation process has focused on trade in goods and services. Phase 2 includes competition policy, intellectual property and investment. Phase 3 incorporates e-commerce protocol. Key substantive issues are still to be completed, including some rules of origin, tariff concessions and specific services sector commitments.

The negotiating process has lacked transparency, with information available only through leaked texts. Social movements, including trade unions, have complained that they have tried in vain to engage with the AfCFTA secretariat.

While the proponents of the deal have claimed the AfCFTA will foster development in Africa and help African businesses, the deal has attracted criticism and opposition as well.

At first, large economies such as South Africa and Nigeria refused to endorse the agreement. Nigerian business groups, manufacturers, traders, farmers, small and medium enterprises expressed concerns that Africa could become a dumping ground of cheap products coming from abroad, which could wreak havoc on the ongoing industrialisation process. However, Nigeria joined at the 11th hour in July 2019, when the deal entered its operational phase, while South Africa had signed a year earlier. Eritrea is the only AU state that has refused to sign.

The AfCFTA is built on the dogma of free-market capitalism. It pushes a model of “development” hinged on increased trade and investment under the guise of pan-Africanism. However, it is “more of the same” trade rules that have been operational under the World Trade Organisation and bilateral agreements. It has been supported by major economic players such as the EU, the US, the African Development Bank, the United Nations Conference on Trade and Development, and the World Bank. Ultimately, it will likely benefit only African elites and transnational capital at the expense of local communities and small-scale traders who have historically traded informally in Africa, the majority of whom are women.

Some foreign powers have already seen opportunities arising from the AfCFTA. China is planning to capitalise on it to connect African and Chinese markets to promote the free movement of goods, persons, capital and technologies. India has signed a trade deal with Mauritius, which would provide a foothold into Africa. Turkish investors also see possibilities for development within the whole continent, while the EU might consider a mega trade deal. The US is speculated to sign a trade deal with the AfCFTA when the African Growth and Opportunity Act expires in 2025. The two parties have already signed a memorandum of understanding to promote trade and investment at the 2022 US-Africa Business Forum.

The full text of the AfCFTA is available here: https://www.bilaterals.org/?afcfta-consolidated-text-march

The following protocols are available here:
• Competition policy: https://www.bilaterals.org/?afcfta-protocol-on-competition
• Intellectual property rights: https://www.bilaterals.org/?afcfta-protocol-of-on-intellectual
• Investment: https://www.bilaterals.org/?afcfta-protocol-on-investment-48215
• Digital trade: https://www.bilaterals.org/?afcfta-digital-trade-protocol-49908
• Women and youth in trade: https://www.bilaterals.org/?afcfta-women-and-youth-in-trade

Last update: October 2023
photo: Paul Kagame/CC BY-NC-ND 2.0


AfCFTA and the economic emergence of Africa
Economists deconstruct the myth surrounding the trade agreement
Africa trade pact gets $1 billion to offset revenue losses
The African Export-Import Bank has mobilized $1 billion for an adjustment facility to offset revenue losses for countries that lower cross-border tariffs as part of an Africa-wide free-trade area.
Mozambique is not in a position to ratify AfCFTA agreement
An economist at the Centre for Public Integrity (CIP) argues that Mozambique is not in a position, in the short-to-medium term, to ratify the African Continental Free Trade Agreement (AfCFTA).
African Continental Free Trade Agreement: Red tape delays start of trading under new pact
All SACU members need to ratify the AfCFTA before any of its members can start trading under it. ECOWAS States were facing the same problem.
Nigeria: Dangote leveraging expansion under AfCFTA
Dangote Industries Limited has stated that its cement expansion plan and fertiliser investments will open new trade routes for the company and Nigeria under the trade deal.
African free trade tariff rules should be completed by July-official
Members of Africa’s new free trade area should complete their tariff reduction schedules and finalise essential rules of origin by July.
African free trade bloc opens for business, but challenges remain
African countries began officially trading under a new continent-wide free trade area, after months of delays caused by the global coronavirus pandemic.
New SA trade agreements now effective
Friday marked the start of trade for South African firms under two new trade agreements, the trade and industry and competition department (dtic) said.
In spite of its many sponsors, the African Continental Free Trade Area (AfCFTA) goes into the wall
The sharp decline in manufactured goods trade and the growing food deficit over the past 25 years call for the African Union to be more modest in its ambitions to become “the next world manufacturing center”, far from the free trade illusion of the AfCFTA.
African ambassadors expect more cooperation with China under new FTA
The AfCFTA requires strong infrastructure linkage across the African continent, an area where China can reach out to help.