African Continental Free Trade Area

African Continental Free Trade Agreement (AfCFTA)
AfricanContinentalFreeTradeArea.svg
Status as of October 7, 2019
  Ratifying parties
  Signed March 2018, not ratified
  Signed July 2018 or later, not ratified
TypeTrade agreement
SignedMarch 21, 2018
LocationKigali, Rwanda
EffectiveMay 30, 2019
ConditionRatification by 22 states
Original
signatories
Signatories
Parties
DepositaryAfrican Union Commission
LanguagesEnglish, French, Portuguese, Arabic, Spanish

The African Continental Free Trade Area (AfCFTA)[8] is a free trade area which as of 2018 includes 28 countries.[1][9] [10][11] It was created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations.[12]The free-trade area is the largest in the world in terms of the number of participating countries since the formation of the World Trade Organization.[13]

The agreement was brokered by the African Union (AU) and was signed on by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018.[14][15] The agreement initially requires members to remove tariffs from 90% of goods, allowing free access to commodities, goods, and services across the continent.[14] The United Nations Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52 percent by 2022.[16] The proposal was set to come into force 30 days after ratification by 22 of the signatory states.[14] On April 2, 2019, The Gambia became the 22nd state to ratify the agreement,[17] and on April 29 the Saharawi Republic made the 22nd deposit of instruments of ratification; the agreement went into force on May 30 and entered its operational phase following a summit on July 7, 2019.[18]

The general objectives of the agreement are to[19]:

  • create a single market, deepening the economic integration of the continent
  • establish a liberalised market through multiple rounds of negotiations
  • aid the movement of capital and people, facilitating investment
  • move towards the establishment of a future continental customs union
  • achieve sustainable and inclusive socio-economic development, gender equality and structural transformations within member states
  • enhance competitiveness of member states within Africa and in the global market
  • encourage industrial development through diversification and regional value chain development, agricultural development and food security
  • resolve challenges of multiple and overlapping memberships

History

Background

In 1963, the Organization of African Unity (OAU) was founded by the independent states of Africa. The OAU aimed to promote cooperation between African states. The 1980 Lagos Plan of Action was adopted by the organization. The plan suggested Africa should minimize 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.[20][21]

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".[22] 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."[23]

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.[20][24]

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.[25]

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.[26] At the summit in Kigali on 21 March 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.[27][28][29]

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.[20][29][30][31]

Declarations signed at the 2018 Kigali summit[32]
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 President Omar al-Bashir Yes Yes Yes
 Tanzania Prime Minister Kassim Majaliwa No Yes No
 Uganda President Yoweri Museveni[33] 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.[34] In January 2020, AU Assembly negotiations are envisaged to be concluded.[35] A draft is expected for the January 2020 AU Assembly.[36]