30 African Union Member States
Africa Union and its Member States.
The AfCFTA complements existing regional trade agreements in Africa
The AfCFTA is the African continent’s most ambitious integration initiative, embedded in the Agenda 2063 of the African Union, whose main objective is to create a single continental market for goods and services with free movement of people and investments, thus expanding intra-African trade across the continent, enhancing competitiveness and supporting economic transformation in Africa.
The AfCFTA is expected to increase intra-Africa trade from an existing level of about 13% to 25% or more through better harmonisation and coordination of trade liberalisation. This will be driven forward by the complementary Single African Air Transport Market and the Protocol on Free Movement of Persons.
Markets for products and services are also needed to increase sustainable investments and jobs - the main goals of the Africa-Europe Alliance launched in 2018. The themes also features highly in the joint political declarations of both continents, notably in the 5th AU-EU Summit and the Post-Cotonou negotiations.
The 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 Settlement.
The AfCFTA agreement aims to progressively reduce and eventually eliminate customs duties and non-tariff barriers on goods and allow free provision of services in priority sectors. Concerning trade in goods, the goal is set for 90% of products at zero duty across the continent.
The different protocols are negotiated in two phases (see figure below). Phase 1 focused on three protocols: trade in goods with its 9 annexes, trade in services with its 3 annexes and dispute settlement. Phase 2 negotiations will focus on the protocols on competition, intellectual property rights and investment.
The figure below explains the structure of the agreement establishing the AfCFTA.
AfCFTA negotiations clearly take into account integration benefits generated by the Regional Economic Communities (RECs).
These arrangements, especially those that are Free Trade Areas or Customs Unions, have their own deeper integration agendas, which they will continue to pursue. Intra-African trade will continue via multiple tracks. As the AfCFTA advances and becomes more consolidated, there should be more policy convergence and a simplification of rules.
To date, all African countries have signed the AfCFTA agreement and 54 national governments have formally committed to the establishment of the AfCFTA with the notable exception of Eritrea. The AfCFTA agreement has been ratified so far by 30 AU Member States, notably Algeria, Burkina Faso, Cameroon, Chad, Republic of Congo, Côte d’Ivoire, Djibouti, Egypt, eSwatini, Equatorial Guinea, Ethiopia, Gabon, Ghana, Guinea, Kenya, Mali, Mauritania, Mauritius, Namibia, Niger, Rwanda, Saharawi Republic, Sao Tome & Principe, Senegal, Sierra Leone, South Africa, The Gambia, Togo, Uganda and Zimbabwe. While the AfCFTA entered into force on 30 May 2019, the extraordinary AU Summit on the AfCFTA held in Niamey on 7 July 2019 launched the operational phase of the AfCFTA with the agreement that trading under the AfCFTA will commence on 1 July 2020 and with the decision to award the hosting of the AfCFTA Secretariat to Accra, Ghana.
Negotiations on Phase I Protocols in trade in goods and trade in services is currently ongoing with African parties (Member States or RECs). Negotiations on Phase I Protocols on competition, intellectual property rights and investments are set to commence end of 2019.
The European Union and its Member States are the African Union’s main partners in this endeavour and have been supporting the AfCFTA process from the very beginning.
Through its Pan-African Programme the EU has earmarked a total of EUR 62.5 Million to support the AfCFTA in the period 2014-20. Additional support comes from the wider EU Aid for Trade for Africa and through the EU External Investment Plan for Africa and the Neighbourhood.
The EU support to the AfCFTA can be categorised into:
- support to the AfCFTA negotiation-ratification process and architecture
- support to the AfCFTA implementation
Support to the process includes direct support to the African Union Commission and its Trade and Industry Department where the AfCFTA negotiation support unit is embedded. EU support to process has been declined into actions in support to support to negotiation fora, provision of expertise in the AfCFTA unit and technical studies on impact upon demand of AU Member States (AU Support Programme), advocacy towards signature and ratification process (UNECA), provision of online tools for negotiations, design and establishment of the African Trade Observatory, integral part of the AfCFTA architecture (ITC).
Support to implementation includes support to AU Member States national customs administrations and RECs in the harmonisation of tariff nomenclature and adoption of the Harmonised System (WCO), development of national AfCFTA implementation strategies in pilot countries (UNECA), development of national capacities in the field of Intellectual Property Rights (EUIPO). More actions covering all aspects of the AfCFTA are being developed upon clear demand of and in close partnership with the African Union Commission.
EU Aid for Trade
EU Aid for Trade is a well-established work stream in EU development cooperation at continental, regional and national levels. The EU and its Member States remain the global Aid for Trade donor leader (32%) with an all-time high of EUR 13,5 billion in 2016. Africa continued to receive the largest share.
EU Aid for Trade supports the goals of the AfCFTA for example in West Africa, where a EUR 92 million programme seeks to increase competitiveness and trade by tapping regional trade opportunities and creating a safe trading environment for small-scale traders, in particular women traders.
In Ghana, a EUR 13 Million programme created safer production and harvesting processes on cereal crops, Ghana’s leading export commodity. Through EU trainings, farmers have gained knowledge of techniques to manage bacteria levels during the production and harvesting processes. As a result, yields have increased and larger and safer amounts of the crops are available for production and export.
The EU External Investment Plan
EU Aid for Trade can be used as a catalyst to generate the total EUR 44 billion of private and public-sector investment unlocked by the EU External Investment Plan. This plan aims to increase investment and job creation and thus also supports the objectives of the AfCFTA.