African Continental Free Trade Area (Afcfta) Agreement

The political momentum towards africa-wide free trade has strengthened. In March 2018, more than 40 countries signed the Continental Free Trade Area (AfCFTA) agreement. After its full implementation, AfCFTA is expected to cover all 55 African countries, with a total GDP of about $2.2 trillion. This NDS reviews recent business developments in sub-Saharan Africa and assesses the potential benefits and costs of AfCFTA, as well as the challenges of its successful implementation. In addition to increasing trade flows for both existing and new products, AfCFTA has the potential to generate significant economic benefits for African countries. These benefits include increased returns from improved efficiency and productivity through better allocation of resources, increased cross-border investment flows and technology transfers. In addition to reducing import duties to ensure these benefits, African countries must remove new trade barriers by making their customs procedures more efficient, reducing their significant infrastructure gaps and improving their business climate. At the same time, policy measures should be taken to mitigate the different effects of trade liberalization on certain groups, as resources are redistributed in the economy and activities move to places where costs are relatively lower. Roberto Echandi is the senior private sector specialist at ETIRI. It focuses on research and policy advice on issues related to cross-border trade in services, negotiations, implementation and maximizing the potential benefits of deep integration trade agreements and the AfCFTA negotiation and implementation process. AfCFTA is a framework agreement covering trade in goods and services, including the following protocols: trade in goods, trade in services, intellectual property rights, competition policy, investment and dispute resolution. AfCFTA is expected to increase intra-African trade from about 13% currently to 25% or more through better harmonisation and coordination of trade liberalization.

This approach is supported by the single market for air transport in Africa and the protocol on the free movement of persons. At the summit, Benin and Nigeria signed the agreement, so Eritrea is the only African state not to be part of the agreement; Since then, Eritrea has applied to join the agreement. Gabon and Equatorial Guinea also tabled their ratifications at the summit. At the time of launch, there were 27 states that had ratified the agreement. [45] [47] [49] The agreement was negotiated by the African Union (AU) and signed on 21 March 2018 by 44 of its 55 member states in Kigali, Rwanda. [15] [16] The agreement first requires members to remove tariffs on 90% of goods, allowing free access to goods, goods and services across the continent. [15] The UN Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52% by 2022. [17] The proposal is expected to enter into force 30 days after ratification by 22 of the signatory states. [15] On 2 April 2019, The Gambia became the 22nd state to ratify the Convention[18] and on 29 April, the Sahrawi Republic tabled the 22nd filing of ratification instruments; The agreement entered into force on 30 May and entered its operational phase following a summit on 7 July 2019. [19] The Continental Free Trade Area (AfCFTA) [9] is a free trade area with 28 countries starting in 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.