The African Continental Free Trade Area (AfCFTA)


African leaders have reached an important milestone in creating a united African market with the launch of the operational phase of the African Continental Free Trade Area (AfCFTA) on 7 July 2019 in Niamey, Niger. The 54-nation trade bloc will unite 1.3 billion people and create a USD 3.4 trillion economic bloc. It is the largest trade bloc to be created since the the World Trade Organization was founded in 1995. It is set to become the biggest integrated market worldwide uniting some 2.5 billion people by 2050. The idea was born in January 2012 during the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union in Addis Ababa, Ethiopia. The AfCFTA agreement was signed on 21 March 2018 at the 10th AU Extraordinary Summit in Kigali, Rwanda. It entered into force on 30 May 2019, one month after the agreement had been ratified by 22 countries. To date, every African country except Eritrea, has signed the agreement; 27 countries have ratified the AfCFTA instruments. Nigeria, Africa’s most populous country and largest economy, along with Benin, became the latest African nations to sign on 7 July 2019. Nigeria’s participation is critical for AfCFTA’s success. African leaders would like to make the free-trade zone operational by July 2020, through five  instruments: 1) the rules of origin, 2) the online negotiating forum, 3) the monitoring and elimination of non-tariff barriers, 4) a digital payment system, and 5) the African Trade Observatory. Ghana was chosen as host country of the AfCFTA permanent secretariat. By eliminating tariffs on intra‑African trade, AfCFTA aims to boost regional trade by 15-25% in the medium term, and strengthen economic growth among African countries. African leaders also hope to gain more bargaining power on all global trade issues. However, African economies will still need to address a large number of operational challenges (i.e. infrastructure, border controls, corruption, trade liberalisation for sensitive commodities, trade in conflict-affected areas, etc.) in order to reap the short and long-term benefits of the newly created free trade area.


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