Africa’s Continental Free Trade Area: Progress and Challenges #

Africa is home to the world’s largest free trade agreement in terms of number of countries, territory, and population. The African Continental Free Trade Area (AfCFTA) covers a market of 1.3 billion people and a combined GDP of $3.4 trillion, with 54 out of 55 African Union member countries signing up to the deal.

While the agreement aims to boost economic growth, intra-African trade, and investment across the continent, implementation has been slow since its establishment in February 2020. African countries continue to trade more with the rest of the world than among themselves, often due to inadequate infrastructure, lack of finance, and weak governance.

Progress and Challenges #

The Secretary General of the AfCFTA highlighted several key points regarding the agreement’s progress and challenges:

1. Market fragmentation: The African market is highly fragmented, with 47 state parties to the agreement, 42 currencies, and vast economic disparities between countries.

2. COVID-19 impact: The pandemic significantly hindered initial progress, with border closures and economic shutdowns across the continent.

3. Legal framework: All protocols of the agreement have been concluded, including areas such as digital trade, rules of origin, and dispute settlement mechanisms.

4. Implementation: The focus has shifted from negotiating rules to implementing them, with 37 countries expected to be trading under AfCFTA rules and preferences by October.

5. Private sector concerns: Some in the private sector feel they haven’t seen the impact of AfCFTA yet, but overcoming 60 years of market fragmentation takes time.

6. Freedom of movement: Only four countries have ratified the African Union’s protocol on the movement of persons, presenting a significant barrier to intra-Africa trade and investment.

7. Infrastructure: More needs to be done to develop the necessary infrastructure for seamless cross-border trade, including transport and logistics networks.

Future Outlook #

The Secretary General expressed optimism about the future of AfCFTA, stating that doubling intra-Africa trade in the next five years is possible with the right tools in place. These include:

1. Improving access to intra-Africa payments
2. Developing trade-supporting infrastructure, particularly in trade corridors
3. Combining infrastructure development with political will and negotiated rules

Despite skepticism at various stages of the agreement’s development, AfCFTA has continued to make progress. The upcoming showcase of goods and certificates of origin by 37 countries in October will demonstrate further implementation of the agreement.

As the continent works to overcome its challenges and realize the full potential of the free trade area, patience and continued effort will be crucial in achieving the goal of increased intra-African trade and economic integration.