Following the current happenings in Africa’s political and business space of late, AFCFTA takes a center stage recently. This article is a first in a mini-series that would unpack what AfCFTA is and what it means for us within the continent. Join us in an AFCFTA March 2021 webinar where we do a more in-depth discussion.
Here’s what the article covers:
- WHAT AFCFTA is and WHY this matters
- The timeline to January 2021
- Importance of trade as a catalyst for the integration of Africa
- Is it just ANOTHER regional economic group?
What is AfCFTA?
The African Continental Free Trade Area (AfCFTA) is the flagship project of the African Union’s Agenda 2063, a blueprint for attaining inclusive and sustainable development across the continent over the next 50 years.
It aims to boost intra-African trade by providing a comprehensive and mutually beneficial trade agreement among the member states, covering trade in goods and services, investment, intellectual property rights and competition policy.
Simply put, AfCFTA aims to ensure that we trade a lot easily amongst each other within the continent, at a rational cost, and in a way that allows our economies and people to thrive. AfCFTA will bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than US$3.4 trillion.
The Timeline from Conception to January 2021
It has taken quite some time to get to the point where we could start trading under AfCFTA rules in January 2021. This dates as far back as 2012, during the 18th Session of the African Union (AU) in Addis Ababa, Ethiopia, when African Heads of State and Government decided to establish the Continental Free Trade Area (CFTA) by 2017.
The Agreement establishing the AfCFTA (the ‘Agreement’) was signed in March, 2018 in Kigali, Rwanda following the conclusion of the main Phase 1 legal texts: These texts include the Agreement along with the Protocol on Trade in Goods, Protocol on Trade in Services, and Protocol on Rules and Procedures on the Settlement of Disputes, which was eventually signed by all 55 African countries represented.
- The Agreement entered into force on 30 May 2019 for the 24 countries that had deposited their instruments of ratification (the official approval from cabinet and signed document from the President/Prime Minister that agrees to enter into an agreement) before this date. In order for the AfCFTA to be binding on the signatory country, it must be ratified in accordance with each country’s internal procedures.
- The OPERATIONAL PHASE of the AfCFTA was launched during the 12th Extraordinary Session of the Assembly on the AfCFTA in Niamey, Niger in July, 2019
- TRADING under the AfCFTA started on the 1st January 2021. As at 15 January 2021, 35 countries have deposited their instruments of AfCFTA ratification with the AU Chairperson.
Importance of Trade as a Catalyst for the Integration of Africa
There are 6 protocols that bring this trading block together viz – The Protocols on Trade in Goods, Trade in Services, Competition Policy, Intellectual Property Rights, Investment, and Rules & Procedures on the Settlement of Disputes. These all serve to increase the ease of doing business and to investor confidence in our region.
It is up to us Africans to learn how the AFCFTA will benefit our countries, how we can make it work for us, and how to ensure its implementation & evolution. Steady but disciplined implementation and adaption will ensure that we own it and benefit from it. An African proverb says, “If you want to go fast – go alone, but if you want to go far – go together”. Now, more than ever is time to remember that.
AFCFTA is not just another regional economic group; it may just be the key to unlock African prosperity in its full glory!
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