The negotiations for the adoption of the Phase II Protocols of the African Continental Free Trade Area (AfCFTA) have started. They will cover investment, intellectual property rights and competition policy. (E-commerce will be added during a third Phase.) It is not yet known in terms of what modalities they will be negotiated, but they must add important building blocks to the AfCFTA’s scheme of things, despite each covering a specific discipline. They are pieces in the puzzle for continental integration and for boosting trade.

The negotiations on an AfCFTA Investment Protocol provide an opportunity to adopt an instrument suitable for Africa’s needs. Far-reaching changes in the industrialisation landscape, new technological developments, the consequences of Covid 19, and the fact that individual African States are keen to promote their own countries as attractive destinations for Foreign Direct Investment (FDI), will have to be weighed. African Governments must take note of global economic and political shifts, technological challenges and opportunities. Some are contemplating comprehensive bilateral trade agreements with external parties such as the United States and the United Kingdom in which investment will be an important aspect. This could lead to a new era of engagement with outside partners via tailored agreements; outside the multilateral context of the World Trade Organisation (WTO).

This Working Paper discusses issues related to an AfCFTA Investment Protocol. It notes caveats that should be considered. They are about the fact that the AfCFTA is a member-driven arrangement, that provisions in the AfCFTA Agreement indicate that a cooperation model is envisaged for investment, and that difficult national choices about policy space and unique domestic needs are part of the process of adopting this Protocol. New trends regarding investment regulation are mentioned.

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