This Trade Report delves into the evolving dynamics of trade, with a spotlight on the burgeoning service sector in Sub-Saharan Africa and the critical role women play within this domain. It underscores the service sector’s emergence as a pivotal engine of economic resilience and growth post-pandemic, presenting an opportunity for Africa to bolster intra-continental trade and global market linkages. Highlighting the challenges and barriers women face, this report argues for comprehensive policy reforms aimed at fostering an enabling environment for digital trade, thus catalysing growth and integration into the global economy. The narrative positions women at the forefront of this transformative journey, emphasising the untapped potential in harnessing their contributions for sectoral growth and economic empowerment.

Further, this report provides an analytical lens on gender dynamics within the labour market, especially post-pandemic, noting a robust recovery in some sectors but also pointing out persisting gender gaps in labour force participation, unemployment, and access to decent work. It touches on the adverse impacts of wage disparities and working poverty levels on women, stressing the necessity for targeted interventions to bolster women’s workforce entry and retention. Through a comprehensive examination of labour force trends and economic participation, the report sheds light on both the strides made towards gender parity and the significant hurdles that remain, underscoring the imperative for gender inclusivity and economic resilience in shaping the future of trade in Sub-Saharan Africa.

The Agreement establishing the African Continental Free Trade Area (AfCFTA) was signed at the 10th Extraordinary Summit of the AU Assembly on 21 March 2018 in Kigali, Rwanda. The AfCFTA Agreement entered into force on 30 May 2019. The  AfCFTA is the continent’s most ambitious integration initiative.

The main objectives of the AfCFTA are to:

• create a single continental market for goods and services, with free movement of business persons and investments;

• expand intra-Africa trade across the regional economic communities and the continent in general;

• enhance competitiveness and support economic transformation; and

• promote industrial development

The AfCFTA Agreement is a comprehensive legal compact which includes the Agreement establishing the AfCFTA, Protocols on Trade in Goods, Trade in Services, Dispute Settlement, Investment, Intellectual Property Rights and Competition Policy. Recently, Digital Trade and Women and Youth have been added to the negotiating agenda.

• Phase 1 negotiations cover Trade in Goods, Trade in Services and Dispute Settlement. The Protocols on Trade in Goods and Trade in Services each have several Annexes covering substantive disciplines. Negotiations on a number of issues (e.g. tariff concessions, rules of origin for goods and schedules of specific commitments for services) are still ongoing. The negotiations of the Protocol on Dispute Settlement have been concluded.

• Phase 2 negotiations cover Investment, Competition Policy and Intellectual Property Rights.

• Phase 3 negotiations cover Digital Trade, and Women and Youth in Trade.

This booklet, updated in February 2024, provides a guide to the AfCFTA and how it fits within Africa’s broader development agenda – the architecture of the AfCFTA Agreement, what the Agreement covers, institutional arrangements, committees and other AfCFTA initiatives.

This edition includes an update on tariff negotiations for trade in goods, rules of origin, Phase II and Phase III negotiations, dispute settlement, the Guided Trade Initiative, the AfCFTA as a framework for Africa’s industrialisation, and value chain opportunities for African and global investors.

View the e-book here.

Further information on the AfCFTA negotiations, as well as the legal texts of the AfCFTA Agreement and ratification status of the legal instruments, is available on tralac’s AfCFTA resources page.

The African Union does not pursue a two-track approach on African integration. Despite the differences in emphasis, levels of ambition and timeframes, both the AFCFTA Agreement and the Abuja Treaty contain plans for integrating African economies and pursuing economic development strategies. They do so at different times and within a prevailing context.

The relationship between the AfCFTA and the AEC is not officially clarified, and it appears as if this need is deliberately downplayed. The Abuja Treaty was ratified and entered into force but seems to serve more of an inspirational function now. The AfCFTA is more pragmatic, shaped by the challenges of the day and the needs of individual nations. It puts less emphasis on solidarity and Pan-Africanism but stresses practical matters such as the preservation of the acquis, reciprocity and global trade relations.

In August 2023, the Appellate Division of the COMESA Court of Justice delivered an important judgment in two appeals brought by a Mauritian company, Agiliss Limited, against earlier rulings of the Court’s First Instance Division. In the FID, Agiliss based both its references squarely and exclusively on provisions of the COMESA Treaty, especially its trade measures. This is significant because the courts of the African Regional Economic Communities (RECs) are not inundated with regional trade-related cases.

The AfCFTA has become the focal point of discussions about a wide range of matters, including how to boost intra-African trade and economic integration, how the State Parties can industrialise and develop value chains, how to accommodate the needs of women traders, and how to deal with technological and digital developments. It has been argued that the AfCFTA also needs a protocol on the environment, and more specifically on climate change. Such a protocol will have to be negotiated, adopted, and ratified by the 55 Members of the African Union (AU). This will be a daunting task, and the new protocol will overlap with existing multilateral and regional climate-related arrangements. Is an additional Protocol on Climate Change under the AfCFTA arrangement therefore needed?

The informal economy plays a crucial role in Africa’s development, particularly without formal economic opportunities. It contributes to income generation, job creation, structural transformation, and food security. Informal cross-border trade (ICBT) occurs daily between neighbouring countries and most of the traders are vulnerable individuals, including women and youth, who typically make up most informal cross-border traders (ICBTs). Although ICBT trade can bring about positive change, African policymakers have historically overlooked its significance. The trade facilitation needs of ICBTs have been frequently disregarded when creating trade policies at regional and national levels within African nations. The lack of proper implementation of regional trading protocols and awareness poses numerous challenges for these traders.

The Common Market for Eastern and Southern Africa (COMESA) has introduced and been implementing measures and programs such as the Simplified Trade Regime (STR) to address this important but neglected policy area. This Trade Brief aims to provide a brief overview of the COMESA STR, followed by a bilateral trade analysis of the specific goods that qualify under the COMESA STR for Zimbabwe, Zambia, and Malawi. The analysis provides a country-by-country breakdown of the relevant trade data.

This Trade Report presents an update on the state of trade liberalisation and intra-Africa trade. It highlights the state of trade liberalisation in Africa, focusing on intra-Africa trade, followed by REC-specific trade. Trade data in Africa is not always accurate as some countries do not report their trade data, in which case mirror data is used. But with many non-reporting countries, this becomes problematic. Therefore, the analysis provided here should be considered as indicative of trading patterns. It is worth noting that overlapping membership within RECs can result in double counting when analysing REC-level data. However, this analysis does provide insights into the state of tariff liberalisation and the increasing trade among the RECs.

Rules of Origin (RoO) are the legal provisions and related criteria that are used to establish the nationality of traded goods. RoO that are used in non-preferential trade serve various purposes, such as for recording trade statistics, to enforce country of origin labelling, trade remedy investigations and for other purposes, and national origin criteria are used to allocate an origin to a product. For preferential trade, RoO criteria are agreed by the contracting parties (in the case of trade agreements) and used to determine the nationality of a product based on its economic origin, that is, the place where any non-originating materials and intermediate goods are substantially transformed to obtain the economic passport of a preferential trade partner.

This makes RoO an essential component of the AfCFTA goods protocol, and of any other preferential trade arrangement. The AfCFTA RoO provisions have been a long time in the making but remain a partly unresolved matter given that the RoO in key sectors have not yet been fully agreed.

This trade brief explores the potential for AfCFTA-enabled regional value chain (RVC) development for Egypt, a North African country with significant value chain links with Europe and the Middle East but limited links with the rest of Africa. It overviews Egypt’s current global and regional value chain involvement and its potential approach to the AfCFTA. It then presents a data and visualisation-driven analysis of Egypt’s current global and regional value chain participation, before drilling into its Africa-specific value chain involvement: both backward and forward participation. Finally, it offers several conclusions relating to the potential for Egypt to both deepen and extend its intra-African regional value chain participation under the AfCFTA, and potentially advance its industrialisation drive.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

There are high expectations about what will happen once the African Continental Free Trade Area (AfCFTA) is fully operational. Some predict that intra-African trade in goods (and some services) will increase dramatically and that investors will flock to the continent. The AfCFTA is expected to bring about a continent-wide preferential trade arrangement comprising fifty-five countries, with 1.3 billion inhabitants and a combined GDP of US$3.4 trillion. As of May 2023, forty-seven African countries have already ratified the AfCFTA Agreement, which is in force since 30 May 2019 but not yet implemented. (Certain tariff issues and rules of origin must still be finalised.)

There is also a belief that the AfCFTA will allow Africa to speak with “one voice” about international trade issues. This paper discusses this possibility. Certain questions should be asked: What does it mean to speak with one voice on trade-related matters? Is the AfCFTA designed to articulate a single African trade-focused voice? What will be said? Who will be addressed? Where and how will joint strategies be formulated? We start by asking why a continent of 55 sovereign states needs a single voice on trade issues and whether it would be possible to agree on what will be said on behalf of all the AfCFTA State Parties.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.