In the public discourse about the new trade opportunities and benefits which will come about once the African Continental Free Trade Area (AfCFTA) is up and running, it is often asked what the AfCFTA, as such, will be able to deliver. There seems to be an expectation that the AfCFTA will be an organisation with independent institutions, specific executive powers, and an original mandate. Is this true? In order to answer this question (and to form realistic expectations about what will happen under this new continental preferential trade regime) one has to consult the AfCFTA Agreement. It contains the obligations which the State Parties were prepared to accept.

This Blog discusses the provisions regarding the powers to be exercised under the AfCFTA, the institutions that will do so, and the relationship with the African Union (AU). They were adopted when the AfCFTA legal instruments were negotiated. This Agreement is in force since 30 May 2019.^[1] (Trade in goods and services will only become possible once the outstanding Schedules on tariff reductions, rules of origin and the conditions applicable to trade in services have been finalised.)

As a starting point for this discussion, it should be noted that the AfCFTA is a flagship project of the AU. The flagship projects of Agenda 2063 refer to key programmes and initiatives to accelerate Africa’s economic growth and development as well as promoting related objectives. These projects also refer to infrastructure, education, science, technology, arts, and culture as well as initiatives to secure peace on the continent.^[2] Agenda 2063 is the “ the continent’s strategic framework that aims to deliver on its goal for inclusive and sustainable development… “.^[3]

The AfCFTA is a member-driven Free Trade Area (FTA), not a Customs Union. However, the AfCFTA legal instruments also cover trade in services in selected priority areas.^[4] There will be other Protocols on matters such as competition, investment, intellectual property rights, digital trade and on women and the youth. They are still to be concluded. Additional Protocols “deemed necessary” within the scope of the Agreement, can be added.^[5] And it is important to note that the Regional Economic Communities (RECs) will continue to function.^[6] The REC FTAs are the building blocks of the AfCFTA.^[7] They have their own legal instruments, institutions, and dispute settlement mechanisms.

Will the implementation of the regime brought about by the AfCFTA be supported by suitable institutions with the necessary powers and liaison functions? he provisions on the AfCFTA institutions only provide for an “In Institutional Framework for Implementation of the AfCFTA”^[8], in line with its member-driven design.

The AfCFTA Agreement does not provide for the establishment of a new international organisation. The “AfCFTA” means the African Continental Free Trade Area.^[9] There is no institution with the explicit power to litigate on behalf of the AfCFTA and to ensure that the State Parties comply with their obligations. Only the State Parties have standing under the Dispute Settlement Protocol of the AfCFTA. A dispute will only be about “a disagreement between State Parties regarding the interpretation and/or application of the Agreement in relation to their rights and obligations”.^[10] The AfCFTA is a State-centred arrangement.

Article 10 of the AfCFTA Agreement says the AU Assembly “shall provide oversight and strategic guidance on the AfCFTA, including the Action Plan for Boosting Intra-African Trade (BlAT). The Assembly shall have the exclusive authority to adopt interpretations of this Agreement on the recommendation of the Council of Ministers. The decision to adopt an interpretation shall be taken by consensus”.

This provision seems to contain the guarantee that the flagship dimension of the AfCFTA will be promoted. It means the AU, through its own institutions, retain an important role in the life of the AfCFTA. This will not necessarily cause unmanageable tensions. The very same States will be the State Parties of the AfCFTA as well as the Members of the AU. It will be the same membership (it is expected that eventually all AU Members will be AfCFTA State Parties) wearing different hats. Decisions will always be taken on the basis of consensus. There is no demarcated institutional hierarchy for enforcing compliance by the State Parties.

The AfCFTA Council of Ministers consists of the Ministers of Trade of the State Parties and is mandated “to ensure effective implementation and enforcement of the Agreement”.^[11] It shall report to the AU Assembly through the Executive Council of Ministers of the AU.^[12] The Council of Ministers is not a permanent institution. It meets twice a year in ordinary session and may meet as and when necessary, in extraordinary sessions. Decisions taken by the Council of Ministers, while acting within its mandate, shall be binding on the State Parties. Decisions that have legal, structural, or financial implications shall be binding on State Parties upon their adoption by the AU Assembly.^[13] The State Parties shall take such measures as are necessary to implement the decisions of the Council of Ministers. They are not self-executing.

The Committee of Senior Trade Officials shall consist of Permanent or Principal Secretaries or other officials designated by each State Party. It shall implement the decisions of the Council of Ministers, develop programmes and action plans for the implementation of the Agreement, ensure proper functioning and development of the AfCFTA, establish committees or working groups, oversee the implementation of the AfCFTA Agreement, direct the Secretariat to undertake specific assignments, and perform any other function consistent with this Agreement or as requested by the Council of Ministers. Subject to directions by the Council of Ministers, the Committee shall meet at least twice a year. It reports to the Council of Ministers.^[14]

The AfCFTA Secretariat (which was established by the AU Assembly) is a new institution in the sense that it is based in Accra, not in Addis Ababa, and is described as “a functionally autonomous institutional body within the African Union system with an independent legal personality.” The Secretariat shall be autonomous of the African Union Commission, but the funds of the Secretariat shall come from the overall annual budgets of the AU. The roles and responsibilities of the Secretariat shall be determined by the Council of Ministers of Trade.

Article 13 of the AfCFTA Agreement should be interpreted in terms of the AfCFTA institutional context of which the Secretariat forms part. One may look at other examples in the AU structures, but the AfCFTA context is unique. One such other AU example is the Statute of the African Peer Review Mechanism (APRM). It states that the APRM shall be an autonomous entity within the AU system. Unlike the AfCFTA Secretariat, the APRM has autonomy in respect of its financial and budgetary processes, while its legal personality, structure, administrative, human resources, and financial management shall be based on the standard procedures of the AU system. This ARPM Statute also says the APRM is established as a Specialised Agency within the AU. This is not the case with the AfCFTA. Article 13 of the APRM Statute provides for diplomatic privileges and immunities, typical of an international organisation. (The AfCFTA Agreement does not have a similar provision.) Article 8 says the continental governing bodies of the APRM shall operate independently of, but in close collaboration with AU organs institutions, bodies, and structures. In the United Nations Specialised Agencies are international organisations in their own right that coordinate their work with the United Nations through negotiated agreements.

One of the noteworthy aspects of the AfCFTA’s institutional scheme of things is that the RECs shall be represented in the Committee of Senior Trade Officials, in an advisory capacity.^[15] Given their important function as building blocks of the AfCFTA, much more will be required in terms of institutional integration of the RECs (and their Member States) into the operations and structures of the AfCFTA. Some of the new Protocols will be focussed on cooperation among the State Parties in respect of matters also covered by REC instruments.^[16]

It seems fair to expect considerable institutional expansion and adjustment in the AfCFTA. This will be necessary in order to ensure opportunities for continent-wide preferential trade materialises and for achieving the General Objectives listed in Article 3 of the AfCFTA Agreement.^[17] It will be for the AfCFTA Council of Ministers to undertake the necessary initiatives, which will probably be closely aligned to the role played by the REC FTAs in terms of trade facilitation, liberalisation, and economic integration. They are the more advanced arrangements. Commentators expecting decisive action and new initiatives from the AfCFTA might, for the time being at least, have to contend with the rather slow pace of innovation that will be more typical of a member-driven FTA on the African continent. The biggest challenge now is to get the AfCFTA up and running.

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^[1]On the entry into force of the AfCFTA, see Art 23 of the of the AfCFTA Agreement.

^[2] Flagship Projects of Agenda 2063 | African Union (au.int)

^[3] https://au.int/en/agenda2063/overview

^[4] Transport, communication, tourism, financial and business services.

^[5] Art 8(3) AfCFTA Agreement.

^[6] Art 19(2) AfCFTA Agreement and Art 8(2) AfCFTA Protocol on Trade in Goods.

^[7] Art 5(b) AfCFTA Agreement.

^[8] Part III of the AfCFTA Agreement.

^[9] Art 1 AfCFTA Agreement.

^[10] Art 1(e), AfCFTA Protocol on Rules and Procedures on the Settlement of Disputes.

^[11] Art 11 (3)(b) AfCFTA Agreement.

^[12] Art 11 (2) AfCFTA Agreement.

^[13] Art 11 AfCFTA Agreement.

^[14] Art 12 AfCFTA Agreement.

^[15] Art 12 (5) AfCFTA Agreement.

^[16] Examples are competition and investment.

^[17] Article 3 refers to the creation of a single market for goods and services, facilitated by movement of persons, capital and natural persons; facilitating investments by building on the initiatives and developments in the State Parties and REGs, and laying the foundation for a Continental Customs Union.