The African Continental Free Trade Agreement (AfCFTA) offers a unique opportunity to promote intra-African trade. The United Nations Economic Commission for Africa (ECA) is convinced that it can also have a positive impact on people’s welfare and contribute to Africa’s industrial transformation.

Jamie Alexander MacLeod, a fellow in the African Trade Policy Centre of ECA, says that by removing tariffs the AfCFTA can increase intra-African trade by 52%, and that by additionally reducing non-tariff barriers it could double this trade.

He presented ECA’s analysis at a policy dialogue held in Kigali on 14 March 2018, involving Rwandan officials, development partners and the diplomatic corps, to discuss regional integration in Africa and the AfCFTA, ahead of the African Union (AU) summit on March 21st at which the AfCFTA will be signed.

Introducing the discussion, Andrew Mold, the Acting Director for the ECA in Eastern Africa, insisted on the importance of the AfCFTA, as a “major milestone towards making the pan-African aspiration a reality”. He explained that despite expected losses in terms of tariff revenues (estimated at about 4 billion USD for the continent), the benefits will be more than four times higher, especially through lower prices for consumer goods.

MacLeod stressed that intra-African exports are more diversified, and hence more useful to Africa’s development, than Africa’s trade with outside the continent, which comprise mostly extractive products such as fuels and minerals. Boosting intra-Africa trade will result in longer-term growth, higher foreign investments and contribute to the continent’s industrialization.

According to MacLeod however, there are further challenges ahead in bringing about the AfCFTA, with significant implementation issues faced by Member States. First, they must complete the AfCFTA Implementation Roadmap, including preparing schedules of commitments in goods and services. They must also ratify the agreement domestically. Speed is of the essence in business, and this should be done rapidly.

The Roadmap should then be complemented by implementing the AFCFTA’s “sister policy”, the pdf Boosting Intra-African Trade (BIAT) Action Plan (928 KB) , in particular through policies to increase productive capacities, improve regional infrastructure and payment systems. National AfCFTA strategies should also be developed to identify and fully utilize the opportunities of the agreement.

The AfCFTA is one of the flagship projects of the African Union Agenda 2063 that the ECA is supporting. It is due to be signed by 55 African countries during the next African Union summit, to be held on March 21st, in Kigali, Rwanda.

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Download:  pdf AfCFTA Questions and Answers (354 KB) - ATPC and AUC, March 2018