The African Continental Free Trade Area (AfCFTA) officially launched its operational phase on July 7, 2019, during the 12th Extraordinary African Union Summit held in Niamey, Niger. This historic moment marked significant progress in fostering economic integration across the continent.
Adopted on March 21, 2018, in Kigali and entering into force on May 30, 2019, the AfCFTA agreement aims to create a unified market for goods and services across Africa.
Highlights of the Launch
Recognition of Ratifying Countries: During the ceremony, 27 countries that had ratified the AfCFTA agreement were honored, while 28 signatories were acknowledged for their commitment. Eritrea remains the only member state yet to sign the agreement.
Ghana as Secretariat Host: It was announced that Ghana would host the AfCFTA Secretariat, underscoring its central role in implementing the agreement.
Key Instruments Adopted: Five key frameworks were introduced to facilitate trade:
1. Rules of Origin: Establishing conditions for duty-free trade within the region.
2. Tariff Concessions: Aiming for 90% tariff liberalization by July 2020, with provisions for sensitive products over a 10-year period.
3. Monitoring Non-Tariff Barriers: An online system to identify and eliminate barriers such as poor infrastructure and customs inefficiencies.
4. Pan-African Payment System: Streamlining payments in local currencies with foreign exchange settlements at year-end.
5. African Trade Observatory: Providing data on trade opportunities, statistics, and exporters/importers across the continent.
Importance of the AfCFTA
With a population of 1.2 billion projected to reach 2.5 billion by 2050, the AfCFTA is set to be the largest free trade area since the establishment of the World Trade Organization. Its benefits include:
Boosting intra-African trade, which currently accounts for only 15-18%.
Promoting industrial growth through regional value chains.
Enhancing Africa’s global trade presence and competitiveness.
Strengthening economic and commercial diplomacy.
Looking Ahead
Trading under the AfCFTA framework is scheduled to commence on July 1, 2020. Until the Secretariat in Ghana becomes fully operational, the African Union Commission will serve as its interim coordinator, ensuring a smooth transition and effective implementation of policies.
