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Building capacity to help Africa trade better

Topics publications: African regional integration

Working Papers

The AfCFTA design will determine how it will function and evolve

The African Continental Free Trade Area (AfCFTA) is anchored in legal instruments concluded by sovereign states. For trade in goods the AfCFTA establishes, through its Protocol on Trade in Goods, a new Free Trade Area (FTA), not a Customs Union (CU). All 55 African Union (AU) Member States are expected to become AfCFTA State Parties, after they have ratified the AfCFTA Agreement or have acceded to it. Forty-four have already done so.

A pilot AfCFTA project, the Guided Trade Initiative (GTI), was launched in October 2022. Eight African States have signed up for this initiative, which allows for preferential trade in a limited number of products. However, this is not yet what the AfCFTA envisages. The Guided Trade Initiative is an interim trial run. It would be much better if the whole scheme of things is put in place in order for the benefits.

This Trade Report discusses the process in terms of which the outstanding tariff schedules and RoO of the AfCFTA are being negotiated and how this arrangement can be expected to function. Where necessary, provisions in the AfCFTA Protocol on Trade in Goods and its Annexes will be mentioned.


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.

Working Papers

How the AfCFTA began and evolved

African economic integration has a long history, but 10 years ago the African Union (AU) Assembly adopted a decision that put matters on a new course. This decision dealt with boosting intra-African trade and fast tracking the establishment of the Continental Free Trade Area (CFTA), as it was then called.

When announced, the strategy for a continental trade arrangement contained little in terms of technical detail but chose to align existing African trade arrangements (the Regional Economic Community (REC) Free Trade Areas (FTAs)) with a new African continental trade regime. The fact that the Tripartite Free Trade Area (TFTA) was singled out as the first milestone event for a continental trade deal, is notable. Looking back, the TFTA made a significant contribution in terms of the principles on which the subsequent AfCFTA was built. The recognition that the REC FTAs would continue with the implementation of their own integration agendas and that other intra-African regional integration initiatives should be supported, was a deliberate and important choice. The 2012 AU Assembly decision laid the foundation for subsequent African Continental Free Trade Area (AfCFTA) deliberations and outcomes.

In June 2015, the AU Assembly met in Johannesburg and adopted the Declaration on the launch of the AfCFTA negotiations. It again emphasised the importance of building the CFTA on existing regional Free Trade Areas and congratulated the COMESA, EAC and SADC Member/Partner States on launching the TFTA in Sharm El Sheikh in Egypt in June 2015. It called this event “a great achievement towards continental integration to be emulated by other regions.” This Trade Report discusses the TFTA and the impact it has on the AfCFTA negotiations in Africa’s quest for greater continental integration.


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.

Trade Briefs

Profiling the African Clothing, Textile & Leather Value Chain: Basic and Gender Dimensions

The AfCFTA Secretariat, in a recent report entitled The Futures Report 2021: Which Value Chains for a Made in Africa Revolution, identified certain industrial sectors and sub-sectors as potential candidates for value chain development under the AfCFTA agreement. The broad sectors included in their list were agricultural/agro-processing, textiles and leather, automotive, pharmaceuticals, mobile financial services and cultural industries.

This Trade Brief looks at the clothing, textile & leather sector (CT&L)[1] in Africa, from the perspective of the regional and global value chain dimensions. The intention is to present the basic value chain metrics of the sector, including gender-disaggregated employment metrics, as a precursor to several more extensive studies forthcoming from tralac over the next few months.


[1] The broadly defined CT&L sector in this context would include at least the following two digit HS codes: 42, 52, 61, 62, 63 and 64. If the narrative does not use the abbreviation ‘CT&L’ then a narrower definition is used, for example only clothing and textiles and excluding leather. This distinction is necessitated by data availability and aggregation issues across different data providers, as well as differences between trade-related sectoral classifications and those for industrial classification.
A detailed concordance, for the broad sectoral CT&L classification, between the trade classification (HS 2017) and industry-trade classification (SITC4) is given in the Appendix.


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.

Trade Briefs

Profiling the African Agricultural Value Chain: Basic and Gender Dimensions

The AfCFTA Secretariat, in a recent report entitled The Futures Report 2021: Which Value Chains for a Made in Africa Revolution, identified certain industrial sectors and sub-sectors as potential candidates for value chain development under the AfCFTA agreement. The broad sectors included in their list were agricultural/agro-processing, textiles and leather, automotive, pharmaceuticals, mobile financial services and cultural industries.

This Trade Brief looks at the broadly-defined agricultural/agro-processing/agri-business sector in Africa[1], from the perspective of the regional and global value chain dimensions. The intention is to present the basic value chain metrics of the sector, including gender-disaggregated employment metrics, as a precursor to several more extensive studies forthcoming from tralac over the next few months.


[1] Due to differences in aggregating sectoral industrial data, the sector has been defined as ‘the broadly-defined agricultural/agro-processing/agri-business sector’. The aggregate contains data for agricultural production; agri-business production, defined as ‘economic activities derived from or connected to farm products’ (BBVA, 2022) and agro-processing, defined as ‘the sub-sector of the manufacturing that beneficiates primary materials and intermediate goods from agricultural, fisheries and forestry based sectors’ (DTIC, 2022).


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.

 

The African Continental Free Trade Area: A tralac guide | 9th edition

This booklet provides a handy guide on the African Continental Free Trade Area (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 the Guided Trade Initiative.

The booklet also offers an overview of intra-African (based on the up-to-date direct trade data from 26 African countries as at end of September 2022) and intra-REC trade in goods (agricultural trade, trade in commodities, non-commodity and non-agriculture trade); intra-African tariffs and MFN tariffs on key intra-African imports; trade in services; and trade facilitation performance.

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pdf The African Continental Free Trade Area: A tralac guide | 9th edition (3.91 MB)

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.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged.

AfCFTA Frequently Asked Questions (FAQs)

What is the AfCFTA?

The African Continental Free Trade Area (AfCFTA) is, in addition to being a free trade area, a flagship project of the African Union (AU) in terms of Agenda 2063. It offers a member-driven blueprint for attaining inclusive and sustainable development across the continent. It is anchored in an overarching Agreement, Protocols and additional Annexes and appendices. They constitute a single undertaking. The AU Summit adopted the AfCFTA Agreement in March 2018, in Kigali, Rwanda.

The general objectives of the AfCFTA, are, according to its own Agreement, to:

  • create a liberalised market for goods and services through successive rounds of negotiations

  • contribute to the movement of capital and natural persons and facilitate investments by building on the initiatives and developments in the State Parties and the Regional Economic Communities (RECs)

  • lay the foundation for a Continental Customs Union at a later stage; to promote and attain sustainable and inclusive socio-economic development, gender equality and structural transformation of the State Parties

  • enhance the competitiveness of the economies of State Parties

  • resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes.

The AfCFTA’s specific objectives are to:

  • progressively eliminate tariffs and non-tariff barriers to trade in goods

  • progressively liberalise trade in services; cooperate on investment, intellectual property rights and competition policy

  • cooperate on all trade-related areas; cooperate on customs matters and the implementation of trade facilitation measures

  • establish a mechanism for the settlement of disputes

  • establish and maintain an institutional framework for the implementation and administration of the AfCFTA.

What do the AfCFTA legal instruments cover?

The AfCFTA Agreement is the founding agreement of the AfCFTA. It establishes the African Continental Free Trade Area and provides for Protocols on Trade in Goods, Trade in Services, Investment, Intellectual Property Rights, and Competition Policy.

The AfCFTA negotiations take place in phases. Phase I covers trade in goods and services as well as dispute settlement. Phase II covers intellectual property rights, investment, and competition policy. A Phase III has been added and will cover E-Commerce.

The AfCFTA Agreement, Protocol on Trade in Goods, Protocol on Trade in Services and Protocol on Rules and Procedures on the Settlement of Disputes (and their annexes and appendices) officially entered into force on 30 May 2019. However, the negotiations to finalise the rules of origin, schedules of tariff concessions, and schedules of specific commitments for the five priority services sectors (business services; communications; finance; tourism and transport) are ongoing. The deadline to finalise these negotiations is June 2021.

Trade under AfCFTA rules can only happen once all the legal arrangements are in place, but the AU Summit decided in December 2020 to allow trade under the reciprocal offers already extended as part of the Phase I negotiations. This has not happened, and at the 35th Ordinary Session of the Assembly of the AU (5-6 February 2022), Heads of State and Government decided that “commercially meaningful trade” should begin at a date to be determined.

Download the full FAQs for more details.

Trade Briefs

Why legal Certainty and Remedies matter for African Trade and Integration

Uncertainty is the enemy of endeavours to promote effective regional integration and trade. Business enterprises must can count on predictable outcomes when making investments and pursuing commercial ventures within national jurisdictions and across state borders. The ability of the private sector to deal with risk factors requires, amongst other things, reliable legal environments. This includes transparent laws and regulations and the availability of legal remedies when rights are infringed or threatened. These should exist at national, regional, and continental levels, especially now that the first steps are being taken to start trading under the African Continental Free Trade Area (AfCFTA). As has often been observed of the AfCFTA; it has tremendous potential for boosting intra-African trade “if properly implemented”. Ultimately, regional integration efforts should be underpinned by inter-state arrangements consisting of appropriate and enabling legal frameworks.

Effective and legitimate dispute resolution mechanisms should also be part and parcel of regional integration efforts. When differences arise about whether the right procedures have been followed or obligations in trade agreements have been respected by officials operating at borders or within national jurisdictions, they should be resolved through the objective and impartial application of mutually agreed norms. The parties to such disputes must accept the results of adjudication or other dispute settlement processes as fair, final, and binding. These basic practices are an integral part of good governance and the rule of law.


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.

Working Papers

The SADC Trade Facilitation Agenda: Lessons for the African Continental Free Trade Area

The World Trade Organisation (WTO) defines trade facilitation as “the simplification, modernisation and harmonisation of export and import processes.” In spite of the liberalisation of trade in various trade rounds, reduction in the cost of transportation and increased use of information and communication technologies, significant barriers related to the streamlining and coordination of trade procedures have remained especially in least developed and developing countries.

In Africa, the inspiration for the trade facilitation provisions in the various regional economic communities (RECs), including the Southern African Development Community (SADC), can be traced to the Lagos Plan of Action and the Final Act of Lagos (1980), the Abuja Treaty (1992) and the Constitutive Act of the African Union (2000). Furthermore, these are the antecedents of the Agreement Establishing the African Continental Free Trade Area (AfCFTA) which was adopted in Kigali, Rwanda on 21st March 2018.

The provisions in the AfCFTA Agreement and SADC Protocol on Trade related to trade facilitation instruments are consistent with provisions in other international agreements (such as the WTO TFA) and customs conventions (such as the WCO Revised Kyoto Convention). This means that lessons learned from implementation of these instruments at the regional and international level are relevant for implementation of the AfCFTA. Challenges to implementation of trade facilitation measures in Africa include non-uniform ratification of international conventions and agreements. Secondly, even when ratified, implementation of the conventions and agreements is not carried out systematically and uniformly at the national and regional level. Thirdly, NTBs have been persistent in spite of the provisions in treaties that once they have come into force, contracting parties are to refrain from applying existing NTBs, and not introduce new ones. The EAC-COMESA-SADC Tripartite mechanism for NTB resolution holds promise not only for SADC, but the AfCFTA as well. These measures require high level political will and commitment for implementation, and the participation of the private sector at all levels.


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 author and do not purport to reflect the views of tralac.

Working Papers

Promoting the textiles and clothing value chain: Role of the AfCFTA

The African Continental Free Trade Area (AfCFTA) is giving the continent new energy to boost intra-Africa trade with the regional economic communities (RECs) free trade areas (FTAs) as building blocks. Promoting regional value chains (RVCs) within these RECs can contribute to the achievement of the goals of the AfCFTA. This is because participation in RVCs creates an opportunity to enhance competitiveness but also support upgrading by accessing global technologies and knowledge. Firms will be exposed to new technologies and know-how that might otherwise be unavailable, as well as to new sources of capital.

The textiles and clothing (T&C) industry is important for many African countries and has the potential to contribute to Africa’s industrial transformation and employment creation. The industry is mostly composed of micro, small and medium enterprises (MSMEs), which can rapidly generate decent jobs – both skilled and unskilled – especially for youth and women.

The T&C industry holds potential for value added benefits and job creation. The African Development Bank (AfDB) estimates up to 600% in value addition can be created along the cotton value chain (VC); from cotton production, spinning and twisting into yarn, to weaving and knitting into fabric, followed by dying, printing and designing. Furthermore, additional jobs and wealth can be created across the fashion industry value chain, from production to marketing. This Trade Report focusses on the T&C value chain and analyses cross border trade flows to identify Africa’s global players and the level of intra-Africa trade.


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.

Trade Briefs

Extended border delays a common experience at Kasumbalesa: What are the real issues and can we expect improvements?

In 2017, neighbouring countries the Democratic Republic of the Congo and Zambia signed a bilateral trade agreement, paving the way for the formation of a joint border post committee tasked with the establishment of a One-Stop-Border-Post (OSBP) at Kasumbalesa. An OSBP is a port of entry in which two neighbouring governments voluntarily agree on a decision to co-locate their port of entry operations at a common end-to-end land border crossing. It is at this border in Africa where five main ports dovetail: one from East Africa (Port of Mombasa), and four from the Southern Africa Development Community (SADC)  (Walvis Bay, Beira, Dar es Salaam and Durban). Kasumbalesa.

This Trade Brief discusses some of the main obstacles that have become perennially synonymous with the extended border delays at Kasumbalesa – one of the major and busiest OSBPs in Africa –  and the trade facilitation challenges  confronted daily by transporters, commercial goods, traders and people. Despite all of these, which are conspicuous and inherent at Kasumbalesa, users of this OSBP need to remain optimistic about the future.


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.

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