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Africa-Europe Alliance: EU support to the African Continental Free Trade Area

Publish date: 
29/05/2019

The agreement establishing the AfCFTA (entry into force on 30 May 2019) is a key priority of Africa´s Agenda 2063 and a flagship project for the continent. The EU lends its full support to the initiative.

The African Continental Free Trade Area (AfCFTA) aims to create a single continental market for goods and services, with free movement of people and capital. Its goal is to boost intra-Africa trade, increase economic growth and attract investments from both within Africa and the world.

The European Union with its new Africa-Europe Alliance for Sustainable Investment and Jobs, made it a key priority to tap the potential of Africa’s continental economic integration and boost trade relations, aiming to contribute to more investments and jobs.

The EU has been supporting African economic integration politically, technically and financially since the very beginning, through:

 

The Pan-African Programme

Through the Pan-African Programme, the EU already committed EUR 62,5 million to support the AfCFTA in key areas. Six projects have so far been launched, as the EU significantly increased its support over the years.

To prepare the AfCFTA, the EU has supported the African Union Commission (AUC) on negotiations, technical expertise and technical studies.  

In cooperation with the World Customs Organisation, the EU launched a programme for African customs administrations in modernising and harmonising the classification of goods. This promotes the harmonisation of custom rules across countries and thus enables goods to move more easily and quickly.

Together with the United Nations Economic Commission for Africa (UNECA), the EU provides support to the advocacy and ratification process by contributing to the development of national implementation strategies for the AfCFTA.

The EU supports the establishment of the African Trade Observatory, requested by the AUC, in cooperation with the International Trade Centre. The Observatory will collect data and analyse trade across borders in Africa, addressing the current lack of up-to date-and reliable data and statistics at continental level.

The EU promotes intellectual property rights protection in Africa by strengthening African national and regional intellectual property organisations and supporting the negotiations of the African Continental Free Trade Area protocol on intellectual property. This initiative is expected to have a positive impact on intra-African trade, investment and job creation.

To strengthen the investment climate between African and EU stakeholders from the public, private, academic and research world, the EU is also setting up a series of high-level strategic sector dialogues.

A total of EUR 62,5 million has been allocated by the Pan-African Programme to support the AfCFTA, of which EUR 26,4 million are under preparation and will be allocated based on identified needs.

 

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 expected to be 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.

 

Background

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.

The EU is Africa’s biggest trading partner, accounting for 33% of total African trade in goods (exports and imports) worth EUR 270,8 billion in 2018. Markets for products and services are also needed to increase sustainable investments and jobs- the main goals of the Africa-Europe Alliance launched by President Juncker 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.