AfCFTA Questions and Answers

AfCFTA Questions and Answers

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29 Jun 2018

Author(s): tralac

What is the AfCFTA?

The AfCFTA, once complete, will be a continent-wide free trade area for those states which have deposited instruments of ratification. It is called a ‘Free Trade Area’ but will be more akin to a comprehensive partnership agreement because the disciplines will go beyond trade in goods to over services, investment, competition and intellectual property.

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, and thus pave the way for accelerating the establishment of a continental customs union. It will also expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation and instruments across the RECs and across Africa in general. The AfCFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better allocation of resources.

Who signed what?

At the Kigali Summit (21 March 2018), one AfCFTA document was open for signature – the consolidated text of the AfCFTA including – the Agreement establishing the AfCFTA, the Protocol on Trade in Goods, the Protocol on Trade in Services and the Protocol on Rules and Procedures on the Settlement of Disputes (download the legally-scrubbed version here).

In total, 44 out of the 55 AU Member States signed the consolidated text of the AfCFTA Agreement at the Summit – see the full list here. Notable absences were South Africa – and other SACU members, except eSwatini (Swaziland) – and Nigeria. However, five additional signatures were added at the 31st African Union Summit on 1 July 2018 in Nouakchott, Mauritania, namely by South Africa, Sierra Leone, Lesotho, Burundi, and Namibia. Nigeria is currently engaged in impact and readiness assessment for the AfCFTA following a 7-month nation-wide sensitisation and consultation exercise to assess the potential risks and benefits of signing the Agreement.

The AfCFTA Agreement is the umbrella instrument. Along with the Protocols included in Phase I, Phase II will see Protocols on Intellectual Property Rights; Investment and Competition negotiated and concluded.

The Annexes to the Phase I Protocols on goods, services and dispute settlement form an integral part of the AfCFTA Agreement.

Two other documents were also open for signature at the Kigali Summit: the Kigali Declaration and the Protocol on Movement of Persons.

The Kigali Declaration on the establishment of the African Continental Free Trade Area (available here) is a commitment to the AfCFTA and its principles.

The Protocol on Movement of Persons (Protocol to the Treaty establishing the African Economic Community relating to Free Movement of Persons, Right of Residence and Right of Establishment – available here) was negotiated under auspices of the AU, and had been adopted by the 30th Session of the AU Assembly on 29 January 2018. It is not part of the AfCFTA suite of instruments. Of course, movement of persons is an essential component of a free trade area and so this Protocol is another relevant legal instrument. However, exactly how it will impact on the AfCFTA is not yet clear. It will depend on the identity of the Parties which have ratified the Protocol on the Movement of Persons as well as the provisions in the AfCFTA instruments on the movement of persons.

Download the full Q&A to find out more.