The African Continental Free Trade Agreement


Basically, AfCFTA will put African economies – and African citizens – on a better economic footing. The agreement will improve competitiveness and promote investment, innovation and economic growth by improving efficiency and removing trade barriers. In fact, it will eliminate tariffs on 90% of goods and gradually apply the same to services, at a time when other parts of the world are reconsidering trade agreements and economic integration. In particular, the abolition of tariffs on goods is expected to increase the value of intra-African trade by 15-25% by 2040. That would be between $50 billion and $70 billion. The Continental Free Trade Area (AfCFTA) [9] is a free trade area with 28 countries from 2018. [1] [10] [11] [12] It was created by the African Free Trade Agreement between 54 of the 55 african union nations. [13] The free trade area is the largest in the world, in terms of the number of participating countries since the creation of the World Trade Organization. [14] Accra, Ghana, is the secretariat of AFCFTA and was commissioned by Ghanaian President Nana Addo Dankwa Akuffo Addo on 18 August 2020 in Accra and handed over to the AU. Sign up for free email notifications when new serial and/or country articles are published on the IMF website. Maryla Maliszewska , lead author, is a senior economist in Trade and Regional Integration Unit (ETIRI) at the World Bank. His area of expertise covers various aspects of trade policy and regional integration, with particular emphasis on the impact of trade on poverty and income distribution. These projects, in coordination with European, Japanese and Indian partners, could have a significant impact on economic growth in Africa and on Africa`s expansion as an external market for goods and services.

As is currently believed, Prosper Africa will be a single point of contact for increasing trade and investment between U.S. and African companies. The initiative has clear links with afCFTA and, if fully implemented and adopted, could bring benefits to both players. Israel Osorio Rodarte is an economist in the Department of Trade and Regional Integration at the World Bank. He has more than 10 years of experience in international development, including economic diversification, structural change and analysis of the distribution of trade and macroeconomic policies. Eritrea has not signed because of tensions with Ethiopia, but after the 2018 Eritrea-Ethiopia summit, the AU Commissioner for Trade and Industry expects Eritrea to sign the agreement. [93] The perimeter of the AfCFTA is important. The agreement will reduce tariffs between Member States and cover policy areas such as trade facilitation and services, as well as regulatory measures such as hygiene standards and technical barriers to trade. Full implementation of AfCFTA would transform markets and economies across the region and boost production in the services, manufacturing and raw materials sectors. At the Kigali Summit, areas of agreement were reached on trade protocols, dispute settlement procedures, customs cooperation, trade facilitation and rules of origin. This was part of Phase I of the agreement, which deals with the liberalisation of goods and services.

There was also a consensus on reducing tariffs to 90% of all goods. Each nation can exclude 3% of the goods from this agreement. [25] In order to facilitate the implementation of the free trade area, the following institutions were created. As a result of the Phase II negotiations, additional committees may be set up through minutes. [38] Africa`s continental free trade area only came into force when 22 of the signatory countries ratified the agreement, which took place in April 2019, when The Gambia was the 22nd country to ratify it. [67] In August 2020, there are 54 signatories, of which at least 30 have ratified and 28 have tabled their ratification instruments. [69] [70] [71] The three countries that have ratified their ratifications but have not yet tabled are Cameroon, Angola and Somalia[71], although