AFCTA What You Know
AFCTA What You Know
AFCTA What You Know
AfCFTA
What you need to know
Frequently Asked
Questions & Answers
Publications Section
Economic Commission for Africa
P.O. Box 3001
Addis Ababa, Ethiopia
Tel: +251 11 544-9900
Fax: +251 11 551-4416
E-mail: ecainfo@uneca.org
Web: www.uneca.org
The designations employed in this report and the material presented in it do not imply the
expression of any opinion whatsoever on the part of the Secretariat of the United Nations
Economic Commission for Africa or the African Union concerning the legal status of any country,
territory, city or area or of its authorities, or concerning the delimitation of its frontiers or
boundaries.
Designed and printed in Addis Ababa, Ethiopia by the ECA Printing and Publishing Unit. ISO
14001:2015 certified. Printed on chlorine free paper.
ii
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
Contents
Introduction.................................................................................................................. 1
1) What is the AfCFTA? What is it about, and what does it aim to achieve? ..................... 3
2) When was the AfCFTA created?............................................................................... 5
3) What does the AfCFTA aim to achieve?..................................................................... 7
4) What does the AfCFTA cover?.................................................................................. 8
5) How does the AfCFTA work? What does its institutional structure look like?............... 10
6) Who is responsible for the implementation of the AfCFTA?....................................... 11
7) What is the relationship between the Abuja Treaty and the AfCFTA?.......................... 12
8) How many African Union Member States have signed the AfCFTA?........................... 13
9) How many countries have ratified the Agreement?.................................................. 13
10) Is there anything that Countries need to do after ratification or is ratification
enough for the AfCFTA Agreement to achieve its objectives? ................................... 15
11) What is the scope of trade policy and regulatory reforms that countries
must undertake to implement the Agreement?........................................................ 16
12) How many State Parties have submitted tariff offers so far?..................................... 19
13) Can we say that the Agreement is now in operation?............................................... 20
14) Has trade under the agreement started?................................................................. 20
15) Is there a plan to complete outstanding negotiations soon?...................................... 21
16) Why does Africa need the AfCFTA? ....................................................................... 22
17) Will the Agreement do anything for African Industrialization? ................................... 23
18) So, can we say that the Agreement will help diversify Africa’s export markets?.......... 25
19) From a broader economic perspective, what can the AfCFTA do for Africa?............... 27
20) Is it correct that the AfCFTA benefits the largest African countries
at the expense of the smallest ? ........................................................................... 28
iii
Contents
21) At the sectoral level, where are the largest gains expected?..................................... 29
22) Will the AfCFTA benefit Africa’s young people?........................................................ 30
23) Will the AfCFTA benefit Africa’s women?................................................................. 31
24) What will the AfCFTA do for Africa’s global voice?.................................................... 31
25) What does the AfCFTA mean for climate change and the environment?..................... 32
26) How does the AfCFTA benefit the African private sector?.......................................... 33
27) What about Non-Tariff Barriers (NTBs)? Will the AfCFTA address these?................... 34
28) What else does the agreement do for Africa’s cross-border traders?......................... 35
29) Much of the Agreement seems to be focused on trade in goods.
What about services?........................................................................................... 35
30) The AfCFTA is about intra-African trade; is there space for international investors?.... 38
31) What about digitalization? Does the AfCFTA help bring Africa forward
into the fourth industrial revolution?....................................................................... 38
32) What are the challenges that African governments, businesses,
and consumers need to be aware of and prepare themselves for?............................ 40
33) What are the internal roadblocks, if any, that stand
in the way of fully implementing the Agreement?..................................................... 41
34) What does the AfCFTA bring to the ordinary African citizen....................................... 44
iv
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
Introduction
Exercising its mandate to promote more effectively in trade negotia-
the economic and social develop- tions at the bilateral, regional, and
ment of its member States and fos- multilateral levels. ATPC also works
ter intra-African integration, the closely with key stakeholders in the
United Nations Economic Com- field of trade policy, including the
mission for Africa (ECA) has been private sector, civil society, and ac-
relentlessly supporting the effort ademia, to ensure that trade policy
to establish and operationalize the serves the interests of the general
African Continental Free Trade public for sustainable and inclusive
Area (AfCFTA) since the inception development.
of the idea in 2012. ECA’s support
to the AfCFTA project is led primar- Using its research and policy anal-
ily by the Regional Integration and ysis function, ATPC has established
Trade Division (RITD), which works itself as the authoritative source of
closely with all other ECA divisions, original insights on Africa’s trade
sub-regional offices (SROs) and the policy options, scenarios, and likely
African Institute for Economic De- outcomes. ATPC has assisted the
velopment and Planning (IDEP). AfCFTA process from its inception
by making the case for it, technical-
The African Trade Policy Centre ly supporting the negotiations, and
(ATPC) is a specialized centre of ex- engaging in relentless campaigns to
cellence within RITD that conducts get the agreement ratified follow-
cutting-edge trade policy research ing its adoption. Since the AfCFTA
and analysis, offers capacity building Agreement entered into force, too,
support to member States, and pro- the ATPC has been supporting State
motes consensus building around Parties to develop and execute in-
key strategic ideas. Established clusive national AfCFTA implemen-
in June 2003, the ATPC works to tation strategies.
strengthen the human and institu-
tional capacities of African Govern- Now that AfCFTA has become – at
ments to formulate and implement least technically – part of national
sound trade policies and participate law and regulation in over 85% of
1
Introduction
the AU member States, ATPC is cur- the opportunities created by the Af-
rently focusing on how to take the CFTA. This information asymmetry
AfCFTA a step closer to the ground needs to be bridged over time.
so that the ordinary African citizen
can make sense of what the free In this regard, ECA is pleased to
trade area is all about and exploit its launch this information booklet,
opportunities. Indeed, the AfCFTA titled AfCFTA: What You Need to
will realize its potential to the full Know, which asks sometimes highly
only if Africans, and particularly the technical questions about the Af-
African business community, under- CFTA and attempts to answer them
stand, own and take advantage of it. in a language that is accurate but
However, we also know that the Af- also non-technical and accessible at
rican business landscape is predomi- the same time. The overall objective
nantly made up of small and medium of this information booklet is to help
enterprises (SMEs), including wom- enhance awareness about the Af-
en-owned businesses, who lack the CFTA among the business commu-
capacity to invest in understanding nity and the general public.
2
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
The ‘AfCFTA’ stands for the African with free movement of goods across
Continental Free Trade Area which borders within the customs union
was established in 2018 via the Af- and a common external trade regime
CFTA Agreement as negotiated by towards third parties2. Put differ-
Member States of the African Union ently, a customs union is a trade ar-
(AU). To understand what the Af- rangement in which a group of coun-
CFTA is one must first understand tries charge a common set of tariffs
what a Free Trade Area (FTA) is. to those countries outside the union
while granting free trade among
An FTA is an arrangement between themselves. Like an FTA, therefore,
two or more countries which seeks a customs union also aims to create
to create conditions for the free conditions for the free movement
flow of trade amongst themselves.1 of goods among the parties to the
In practice this means countries es- agreement that established the cus-
tablishing FTAs agree not to charge toms union. However, unlike an FTA,
import tariffs, i.e. taxes on imported a customs union establishes a com-
goods, or other barriers from other mon external trade regime, which
members of the FTA bloc. means all the parties to the customs
union apply the same tariffs and re-
To better understand an FTA, it is lated regulations on goods coming
useful to compare it with the related from outside the customs union. As
concept of a customs union. A cus- a result, a customs union is deeper
toms union is defined as the substi- and more ambitious than an FTA.
tution of a single customs territory
for two or more customs territories
See GATT Art. XXIV:8(b).
1
Ibid
2
3
The Framework of the African Continental Free Trade Area (AfCFTA)
FTAs and customs unions are col- Note, however, that the above de-
lectively referred to as regional scription focuses exclusively on
trade agreements (RTAs), or prefer- trade in goods because the Gener-
ential trade agreements (PTAs). The al Agreement on Tariffs and Trade
AfCFTA establishes an FTA among (GATT) of 1947 that first estab-
its State Parties in the sense that lished the multilateral trading sys-
each country that is a party to the tem – and therefore first introduced
AfCFTA Agreement works towards these concepts – was limited in its
creating conditions for increasingly ambition to goods. The AfCFTA is
free flow of trade. But the AfCFTA much more ambitious; it already
is not a customs union yet because covers goods, services, and dispute
each of the State Parties retains settlement, and aims to bring sev-
the policy space to freely set their eral new areas of regulation into its
own external tariffs and other reg- remit – including investment, intel-
ulations vis-à-vis third countries, lectual property, competition policy,
i.e. non-African countries as well as digital trade, and women and youth
African countries that are not yet in trade. More will come on each of
parties to the AfCFTA Agreement. these below. Indeed, a key objective
of the AfCFTA is to lay the foun-
dations for a Continental customs
union and a single market.
4
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
5
6
Timeline & Milestones of the AfCFTA
Feb. March
2020 2018
Trading formally AfCFTA Enters
begins into Force
AU Assembly adopts
Oct. three protocols:
2022 Competition, Intellectual
AfCFTA Guided Trade
Initiative Announced Property and Investment
The Framework of the African Continental Free Trade Area (AfCFTA)
5
https://au-afcfta.org/purpose-the-afcfta/
6
https://au.int/sites/default/files/treaties/36437-treaty-consolidated_text_on_cfta_-_en.pdf
7
The Framework of the African Continental Free Trade Area (AfCFTA)
8
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
AfCFTA Agreement
Phase I Phase II
9
The Framework of the African Continental Free Trade Area (AfCFTA)
7
https://au.int/sites/default/files/treaties/36437-treaty-consolidated_text_on_cfta_-_en.pdf
10
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
8
https://au-afcfta.org/secretariat/
11
The Framework of the African Continental Free Trade Area (AfCFTA)
9
https://trade4devnews.enhancedif.org/en/op-ed/implementing-afcfta-2021
10
https://au.int/sites/default/files/treaties/37636-treaty-0016_-_treaty_establishing_the_african_
economic_community_e.pdf
11
https://au.int/sites/default/files/treaties/37636-treaty-0016_-_treaty_establishing_the_african_
economic_community_e.pdf
12
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
wards African integration. The Af- mentum and help Africa realize the
CFTA seeks to build upon this mo- vision contained in the Abuja Treaty.
12
Data from UNCTADStat, Accessed September 2022. Note: Total Trade defined as the sum of ex-
ports and imports to/from Africa at the individual country level
13
AfCFTA State of Play (February 2023)
14
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
15
AfCFTA State of Play (February 2023)
In implementing the AfCFTA Agree- blocks for the AfCFTA itself. As a re-
ment, different African countries sult, the AfCFTA-inspired reforms
start from different positions de- build on existing regional and global
pending on the kind of policies and frameworks, which should make the
regulations they had prior to the process of AfCFTA implementation
entry into force of the Agreement. at the national level relatively easier
For example, most AfCFTA State to manage.
Parties are already members of the
WTO, which means they are likely Yet, the level of trade liberalization
to have put in place trade policies, envisaged in the AfCFTA is quite am-
regulations, and institutions that bitious. For example, AfCFTA State
aim to create a conducive trade en- Parties have agreed to eliminate
vironment that reflect WTO law. tariffs on 97% of tariff lines over an
In these countries, most of the Af- agreed period of time while they al-
CFTA-inspired changes are only lowed themselves the freedom to
incremental in nature; they are not exclude a maximum of 3 percent of
innovations. Likewise, virtually all total tariff lines from liberalization.
AfCFTA State Parties participate Of the 97% of products whose tar-
in one or more RECs within Africa, iffs are slated for reduction and elim-
which are meant to serve as building ination, there are two categories:
16
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
13
LDCs have the option to start liberalizing sensitive products 5 years after the start of trading under
the Agreement, i.e. until 1 January 2026. However, the end date for tariff liberalization would remain
the same.
17
AfCFTA State of Play (February 2023)
tion standard ensures that the de- of goods coming into that country
cision to eliminate tariffs on 97% of from the rest of Africa and reduces
tariff lines does not end up impact- the risk of future protective barriers
ing adversely on the small amount being imposed.
On the next 3% of
Final 3% tariff lines countries
(Excluded) have the right to
maintain tarrifs
18
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
Initial
Tariff: Year 2:
25% 15%
2020 2022
Year 4:
Year 1: 5%
20%
2024
2021
Year 3:
10%
Year 5:
2023 0%
2025
19
AfCFTA State of Play (February 2023)
The approach adopted for ser- sectors that have not been chosen
vices-liberalization started with as priorities in the first phase. On
the identification of a minimum of that basis, as of January 2023, all
five priority sectors for negotia- Member States, except three, have
tions – transport, communication, submitted their services liberaliza-
finance, tourism and business ser- tion offers for technical verification
vices. Plans are already in place to by the Secretariat.
bring into negotiations the services
Yes, the ‘operational phase’ of the trading’ under the AfCFTA Agree-
AfCFTA was launched by an Ex- ment. Therefore, the Agreement
traordinary AU Summit in Niamey, is operational for those Member
Niger, on 7 July 2019 and 1 January States that have ratified it.
2021 was set as the date for ‘start of
As noted above, while the opera- including agreed rules of origin and
tional phase of the Agreement was the schedules of concessions and
launched as early as July 2019, commitments, needed to be in place
three years later, in July 2022, the for actual trade to start. The nego-
SG of the AfCFTA Secretariat stat- tiations on these instruments are in
ed that “trading under the AfCFTA their final stages. Indeed, as indicat-
preferences has not taken place”.14 ed above, in October 2022, the Af-
There are several factors behind that, CFTA Council of Ministers launched
the Covid-19 pandemic being one. the AfCFTA Guided Trade Initiative,
Also, several additional instruments, a pilot project involving eight select-
See Statement by the AfCFTA Secretariat Secretary-General to the Ninth (9th) Meeting of the
14
Council of Ministers (CoM) of the African Continental Free Trade Area (AfCFTA), 26 July 2022, Af-
CFTA/COM/9/REPORT/DRAFT, paras. 54 ff.
20
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
Yes. In February 2022 the Assem- June 202215. While these deadlines
bly put forth a directive endorsing have been missed, the political com-
the start of trading under Provision- mitment to get the job done expedi-
al Schedules of Tariff Concessions tiously is unmistakable.
pending the conclusion of all out-
standing issues on tariff schedules. Phase II negotiations are also pro-
This was further emphasized in June gressing. For quite some time, spe-
2022 by the Council of Ministers. cialized Committees on investment,
Additionally, the Assembly directed on intellectual property rights, on
the AfCFTA Secretariat to continue competition, on digital trade, and on
facilitating negotiations. women and youth in trade have been
working hard to complete the Af-
Regarding services, the Assembly CFTA package. The draft protocols
took note of the establishment of five on the first three were adopted by
sub-committees on Specific Commit- an extraordinary meeting of the Af-
ments, Regulatory Frameworks, Pro- CFTA Council of Ministers that was
fessional Qualifications, Services-re- held from 27 to 28 October 2022 in
lated Issues, and Services Rules. It Libreville, Gabon. At its 36th ordinary
initially set a goal to complete nego- session held in Addis Ababa, Ethio-
tiations on the five priority sectors pio, from 18-19 February 2023, the
identified previously (financial, com- AU Assembly adopted these three
munication, transport, professional protocols and opened them for rat-
services, and tourism) by the end of ification by member states.
15
https://au.int/sites/default/files/decisions/41583-Assembly_AU_Dec_813-838_XXXV_E.pdf
21
Why do we need the AfCFTA? How can Africa benefit?
16
Data from UNCTAD Stat, Accessed September 2022
17
Ibid.
18
Average tariffs faced by exporters within regions calculated with reference group weighted aver-
age tariffs based on 2013 MAcMap-hs6. For cost estimates of non-tariff barriers see, Cadot, O., A.
Asprilla, J. Gourdon, C. Knebel and R. Peters. 2015. “Deep Regional Integration and Non-tariff Mea-
sures: A Methodology for Data Analysis.” Policy Issues in International Trade and Commodities Study
Series 69, UNCTAD (United Nations Conference on Trade and Development), Geneva.
22
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
23
Why do we need the AfCFTA? How can Africa benefit?
30% 30%
34% 39% 43% 41% 29% 34% 46% 45% 46% 43% 44% 39%
20% 20%
10% 10%
0% 0%
2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021
Manufactured goods (SITC 5 to 8 less 667 and 68) All food items (SITC 0 + 1 + 22 + 4)
24
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
21
Data from UNCTADStat, Accessed September 2022
22
Data from UNCTADStat, Accessed September 2022
25
Why do we need the AfCFTA? How can Africa benefit?
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Northern Africa Eastern Africa Central Africa Southern Africa Western Africa
Note: Scores closer to 1 indicate higher levels of diversification whereby scores closer
to 0 indicate lower levels of diversification
Source: UNCTADStat Database
26
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
23
United Nations. Economic Commission for Africa; United Nations. Economic Commission for Af-
rica (2021-07). New assessment of the economic impacts of the agreement establishing the African
continental free trade area on Africa: Policy Brief. Addis Ababa :. © UN. ECA,. https://hdl.handle.
net/10855/46750”
27
A game changer for Africa's internal and external
trade relations
Why doprovides
The AfCFTA we need the AfCFTA?TheHow
an unprecedented increasescan Africa
in relative terms forbenefit? Effective implementation of the AfCFTA
opportunity for Africa's transformation, agrifood, industry and services will not would therefore not only boost
competitiveness and development. lead to equal increases in absolute terms, intra-African trade but also help Africa
because intra-African trade is currently industrialize and diversify away from
dominated by industry. energy and mining.
Value of
Intra-African trade ≈ $113 bn + 405% + 577%
(compared to 2020)
(compared to 2020)
Share of
Intra-African trade
≈ 14.2% ≈ 19.4% ≈ 24.6%
37% increase compared to 2020 73% increase compared to 2020
The AfCFTA will also contribute to reduce the current trade dependence of Africa on its external partners
Currently, around 85% of Africa’s formal
20) Is it correct that the AfCFTAIntra-African
benefits
trade is with the rest of the world.
alue-added p
trade
the2045largest
low v rod
TS:
African countries at the expense of the smallest ?
uc
OR
}
EXP
ts
2020
IM l g
of income disparity O R TS: In dand a
ustr every econ- So, while there is heterogeneity be-
P i
omyAfrica’s
is different.
imports from the restDiversified econo-
of the world are mostly industrial goods (whichtween countries, the AfCFTA holds
account for 60% of Africa’s total imports from the rest of the world).
mies such as Ethiopia, Rwanda, and something for every country. ECA
Côte d’Ivoire may see earlier bene- estimates that with full liberaliza-
fits from tariff liberalization. Over tion of tariffs, by 2040, exports to
the longer-term, industrialization Africa will be 23% higher for non-
may benefit countries like South Af- LDCs, and 21% for LDCs, nearly
rica and Kenya more. Others that identical25. The key is for AfCFTA
24
https://www.atlanticcouncil.org/blogs/africasource/who-are-the-winners-and-losers-of-africa-s-
new-free-trade-agreement/
25
https://archive.uneca.org/sites/default/files/PublicationFiles/brief_assessment_of_afcfta_modali-
28
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
ties_eng_nov18.pdf
26
https://uneca.org/sites/default/files/keymessageanddocuments/en_afcfta-infographics-11.pdf
29
the agreed preferential terms.
Refined oil,
mining
Wood and paper, chemicals,
rubber, plastic and
pharmaceutical products, Expected benefits in refined oil
vehicles and transport need to be analyzed carefully, in
Cereals and crops, milk and light of environmental concerns
dairy products, sugar, equipment, metals, textile, associated with C02 emissions
processed food, rice, meat apparel & leather products,
Tourism and transport other manufactured from fossil fuels
products
30
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
Yes, it will. To mention just two ex- reducing tariffs and other barriers
amples, women are estimated to to cross-border trade, the AfCFTA
account for around 70 per cent of reduces the perceived incentives
informal cross-border traders in of informality, thereby encouraging
Africa. Women also represent 58 informal traders to operate through
per cent of all Micro, Small, and Me- formal channels that offer more pro-
dium Enterprises (MSMEs) in Afri- tection. Overall, the contribution of
ca. When engaged in such activity, the AfCFTA to gender equality and
women are particularly vulnerable women economic empowerment
to harassment, violence, confisca- is expected to be significant. Once
tion of goods and even imprison- again the decision to negotiate a
ment. Additionally, research has standalone AfCFTA Protocol on
shown that many women-led firms, Women and Youth in Trade, a first in
especially MSMEs are less profit- history, is indicative of the determi-
able than those owned by men. By nation to achieve this goal.
The world sees Africa as scores of AU Agenda 2063, Africa can achieve
small and fragmented units with lit- more only if it can “speak with one
tle to no voice and engages with it voice and act collectively to promote
as such. This fragmentation limits our common interests and positions
Africa’s ability to play a meaningful in the international arena”. Indeed,
role in making the rules that govern only in this manner can Africa ensure
global economic relations. Only by the unity and solidarity necessary to
forging a common position on im- withstand the continued external in-
portant matters of common interest terference in its affairs. With a sin-
can Africa become strong enough gle voice, Africa can negotiate better
at the negotiating table to write its trade deals than what each of the 55
interests into the global rules of en- AU member States have been able
gagement. Using the language of the to achieve individually.
31
Why do we need the AfCFTA? How can Africa benefit?
The International Panel on Climate but suffers the most from it. While
Change (IPCC) put it well when it increased trade under the AfCFTA
said: is expected to support the Conti-
nent’s industrialization and broad-
“Africa has contributed among based development, more trade
the least to greenhouse gas may also raise concerns about its
emissions, yet key development impact on the climate. For example,
sectors have already experi- increased economic activity often
enced widespread loss and dam- translates into increased demand
age attributable to anthropo- for transportation of goods, which in
genic climate change, including turn requires additional investment
biodiversity loss, water short- in trucking and transport infrastruc-
ages, reduced food production, ture, like roads and bridges. This
loss of lives and reduced eco- would also mean increased move-
nomic growth” (IPCC, 2022) ment of people across borders. It is
thus natural that questions about
In other words, Africa contributed the impact of the AfCFTA on climate
the least to causing climate change change are being raised.
32
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
The fact that Africa has hardly con- same time, neither should Africa’s
tributed to climate change does efforts to bring about development
not mean Africa should ignore this through the AfCFTA be undermined
existential challenge. In this con- by climate change considerations.
text, the AfCFTA can be a tool for Climate justice demands that the
reducing emissions as it can poten- principle of common but differenti-
tially increase the availability and af- ated responsibilities is operational-
fordability of environmental goods, ized to the letter and spirit.
services, and technologies. At the
33
The AfCFTA and African Businesses
NTBs, i.e. all barriers to trade that es NTBs is through the Continen-
take a form other than tariffs or cus- tal Non-Tariff Barrier Mechanism
toms duties, pose a major challenge (the NTB Mechanism), available at
to cross-border trade on the Con- https://tradebarriers.africa/home.
tinent. Some examples of NTBs are The NTB Mechanism enables busi-
discretionary import licensing pro- nesses and traders to submit their
cedures, technical and health-re- NTB-related complaints, which
lated standards, and quantitative will then be forwarded to nomi-
restrictions which can include out- nated focal points in the countries
right bans against the importation against which the complaints are
of products from particular coun- lodged for follow up and necessary
tries. Tackling these pervasive and intervention. The tool is currently
damaging instruments is therefore operational, but widespread use of
paramount to a successful trading the tool has yet to materialize since
arrangement. And the principle meaningful trade under the AfCFTA
in the AfCFTA Agreement is very is only just starting. As of January
clear: they are prohibited. 2023, only a handful of claims, six
to be exact, have been registered.
But, in practice, we need to do a lot It is expected that as preferential
more than make a blanket state- trade flows under the terms of the
ment such as this. The principal tool AfCFTA increase, so will usage of
with which the AfCFTA address- the tool.
34
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
35
The AfCFTA and African Businesses
29
https://www.wto.org/english/tratop_e/serv_e/serv_sectors_e.htm
36
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
Business &
Professional
Other Communication
Construction &
Transport Related
12 Service Sectors
Tourism Distribution
Health and
Education
Social
Financial Energy
Environmental
37
The AfCFTA and African Businesses
Yes. While the trade case for the Af- lation across the continent without
CFTA is compelling, the case for in- impediments.
vestment is equally so. The AfCFTA
promises to integrate over 50 small When the AfCFTA is in full force
and fragmented markets into one Africa’s historical experiences with
single market of 1.4 billion people under-investment must change. To-
and a combined GDP of USD 2.4 day, despite being home to almost
trillion30. The AfCFTA then provides 17 percent of the global population,
any investor, African or otherwise, Africa accounts for just 3.9 percent
with the economies of scale neces- of world investment stock (2020)31.
sary to justify investments of any The AfCFTA makes Africa ripe for
size. It does this by giving investors international and intra-African in-
the certainty that once a product vestment and provides an opening
is produced in Africa, it will meet for investors to engage with it in
the AfCFTA rules of origin require- ways never before possible.
ments and benefit from free circu-
30
Data from World Bank Databank, Accessed September 2022
31
UNSD 2019, available at unstats.un.org/, and UNCTADStat, available at unctadstat.unctad.org
32
https://centurionlg.com/2022/01/26/the-e-commerce-protocol-of-the-afcfta-possible-consider-
ations/
38
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
0.8
69%
0.7
0.6
54%
0.5
0.4
33%
0.3
22%
0.2
14%
0.1
0
Acqui red Adequate Trained existing Conducted Advertising Developed new line Hired new employees
Technologies or tool s employees/staff Campaign of online products for Digitalization
Source: ECA & IEC (2021). Reactions and Outlook to COVID-19 in Southern Africa. IEC: Mauritius & ECA: Addis Ababa. April 2021
33
https://www.weforum.org/focus/fourth-industrial-revolution
39
Challenges with implementing the AfCFTA
existing ones when in-person inter- lization in the 21st century and is
action was limited34. in line with other continental initia-
tives such as the AU digital Trans-
Ongoing negotiations strive to de- formation Strategy for Africa which
sign a protocol that takes into con- seeks to build a Digital Single Mar-
sideration the importance of digita- ket in Africa by 203035.
34
https://www.uneca.org/sites/default/files/uploaded-documents/ATPC/reactions-and-outlook-to-
covid-19/COVID-19_Africa-Impact-Survey_March2021_Final_English_Release_22042021.pdf
35
https://au.int/sites/default/files/documents/38507-doc-dts-english.pdf
40
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
41
Challenges with implementing the AfCFTA
42
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
43
Challenges with implementing the AfCFTA
https://papss.com
36
44
The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers
First, African citizens benefit in ter paying jobs than those that are
their role as businesspersons. As more closed off.
discussed earlier in response to
Question #26 on the role of the Finally, African citizens benefit
AfCFTA for the African private sec- from the AfCFTA in their role as
tor, the AfCFTA is essentially about consum-ers since, in the end, every
progressively creating a large single one of us is a consumer. When the
market in which African businesses AfCFTA forces national markets
can produce and trade freely. To the to open themselves to competition
extent the AfCFTA benefits African from other countries, more products
businesses, the African citizen bene- and services will compete for con-
fits in his or her capacity as the own- sum-ers. Competition is always good
er or operator of these busi-nesses. for consumers because it creates
more choice, brings better prod-
Second, in their role as workers ucts and services to the market, and
Af-rican citizens will also benefit tends to make these products and
from the AfCFTA. Research shows services available at lower prices.
that a business environment that
sup-ports entrepreneurship cre- In summary, the AfCFTA is good for
ates more jobs, especially through business, but it is also good for the
the ability of businesses to bring ordinary citizen in her capacity as a
innovation and investment , while consumer, worker, and entrepreneur.
more open economies create bet-
45
Timeline & Milestones of the AfCFTA
Feb. March
2020 2018
Trading formally AfCFTA Enters
begins into Force
AU Assembly adopts
Oct. three protocols:
2022 Competition, Intellectual
AfCFTA Guided Trade
Initiative Announced Property and Investment