With a population of over 1.5 billion people, and making significant progress at deepening economic and social integration, Africa is a strong market for continental trade and investment. The African Continental Free Trade Area (AfCFTA), now ratified by 49 countries, aims to accelerate Africa’s trade and integration agenda, and has largely transitioned from the design and negotiation phase to implementation and operationalisation. At least 25 countries have gazetted their provisional schedules of tariff concessions and are able to trade with each other under the AfCFTA preferential trade regime.
Notable milestones have been reached:
- The AfCFTA is a fully-fledged free trade area with its own institutional architecture in place.
- Enabling instruments that are key to the functionality of intra-African trade are finalized: The e-Tariff Book, a web-based resource providing businesses with essential tariff and rules of origin information; the Pan-African Payment and Settlement System (PAPSS) – cross-border financial market infrastructure to enable payment transactions across Africa in local currency, with growing levels of adoption by commercial banks; and the AfCFTA Adjustment Fund to promote commercially viable investments that enable trade and promote diversification, recently making its first significant investment.1
- The Guided Trade Initiative (GTI) was successfully deployed. This is a pilot project that supported early commercially meaningful trade to help test the operational, institutional and legal policy environment of the AfCFTA.
Work continues to finalise rules of origin (specifically on textiles and clothing, and autos), and ratifications by Benin, Eritrea, Libya, Somalia, Sudan and South Sudan remain outstanding. Work must also progress on implementing the AfCFTA’s non-tariff agenda (trade facilitation issues, electronic certificates of origin, implementation of the services commitments, mutual recognition agreements on qualifications and standards and so on).