African Continental Free Trade Area (AfCFTA) Legal Texts and Policy Documents
The African Continental Free Trade Area (AfCFTA) is flagship project of the African Union’s Agenda 2063, a blueprint for attaining inclusive and sustainable development across the continent over the next 50 years. It aims to boost intra-African trade by providing a comprehensive and mutually beneficial trade agreement among the State Parties covering trade in goods and services, investment, intellectual property rights, competition policy, digital trade, and women and youth in trade.
The main objective of the AfCFTA is to create a single market for goods and services, facilitated by movement of persons, in order to deepen the economic integration of the African continent. More specifically, the State Parties shall progressively eliminate tariffs and non-tariff barriers, 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 concerning their rights and obligations, and establish and maintain an institutional framework for the implementation and administration of the AfCFTA.
The AfCFTA Agreement establishes a Free Trade Area (FTA) which will bring together all 55 member states of the African Union, covering a market of more than 1.3 billion people, including a growing middle class and youth population, and a combined gross domestic product (GDP) of more than US$3.4 trillion. In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organisation. Eight regional economic communities (RECs) form the building blocks of the AfCFTA.
Estimates from the Economic Commission for Africa (UNECA) suggest that the AfCFTA has the potential both to boost intra-African trade by 52.3 percent by eliminating import duties, and to double this trade if non-tariff barriers are also reduced. Through the gradual elimination of tariffs and the reduction of barriers to trade in services, Africa’s income is expected to grow by $450 billion by 2035. According to the World Bank, the agreement has the potential to lift 30 million people out of extreme poverty, although achieving this potential will depend on putting in place significant policy reforms and trade facilitation measures.
The AfCFTA negotiations take place in phases. In Phase I, protocols on Trade in Goods, Trade in Services, and Dispute Settlement have been concluded. The AfCFTA will see the progressive liberalisation of 97% of intra-Africa tariffs on trade in goods. However, schedules of tariff concessions and rules of origin, which form an integral part of the Protocol on Trade in Goods, are you to be completed.
Phase II of the AfCFTA negotiations covers Investment, Competition and Intellectual Property Rights. These Draft protocols have been adopted by the AU Assembly. These Protocols will, however, have Annexes, which are still to be negotiated. A third phase has been added, which will cover digital trade and women and youth in trade. These negotiations have recently started.
The 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union, held in Addis Ababa, Ethiopia in January 2012, adopted a decision to establish a Continental Free Trade Area by an indicative date of 2017. This deadline was, however, not met. The Summit also endorsed the Action Plan on Boosting Intra-Africa Trade (BIAT) which identifies seven priority action clusters: trade policy, trade facilitation, productive capacity, trade related infrastructure, trade finance, trade information, and factor market integration.
African leaders held an Extraordinary Summit on the African Continental Free Trade Area (AfCFTA) from 17-21 March 2018 in Kigali, Rwanda, during which the Agreement establishing the AfCFTA was presented for signature, along with the Kigali Declaration and the Protocol to the Treaty Establishing the African Economic Community relating to the Free Movement of Persons, Right to Residence and Right to Establishment. On that occasion, 44 out of the 55 AU member states signed the consolidated text of the AfCFTA Agreement, 47 signed the Kigali Declaration, and 30 signed the Protocol on Free Movement. To date, only Eritrea has yet to sign the consolidated text of the AfCFTA Agreement.
The Agreement entered into force on 30 May 2019 for the 24 countries that had deposited their instruments of ratification with the African Union Commission (AUC) Chairperson – the designated depositary for this purpose. As at August 2023, 47 countries have both signed and deposited their instruments of AfCFTA ratification with the AUC Chairperson. The State Parties are the AU Member States that have ratified the AfCFTA Agreement or have acceded to it, and for whom this Agreement is in force.
The operational phase of the AfCFTA was launched during the 12th Extraordinary Session of the Assembly of the African Union in Niamey, Niger on 7 July 2019. The AfCFTA will be governed by five operational instruments – the Rules of Origin, tariff concessions, online mechanism for monitoring, reporting and elimination of non-tariff barriers, the Pan-African Payments and Settlements System (PAPSS), and the African Trade Observatory. The AfCFTA Secretariat will facilitate the efficient conduct of business of the AfCFTA and is charged with various responsibility related to the implementation of the AfCFTA, including the annual budget and work programme. The AfCFTA Secretariat was officially handed over in Accra, Ghana on 17 August 2020.
An Extraordinary Summit of the AU Assembly on the AfCFTA took place virtually on 5 December 2020. The Assembly approved the start of trading under the AfCFTA Agreement as 1 January 2021, although this did not materialise. On 7 October 2022, the AfCFTA Secretariat launched the AfCFTA Guided Trade Initiative (GTI) in Accra, marking the commencement of trade under the Agreement for eight (8) participating countries: Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia, representing the five regions of Africa. The GTI is a pilot initiative to test the operational, institutional, legal and trade policy environment under the AfCFTA.
More information can be found in tralac’s guide to the AfCFTA booklet as well as several factsheets and Frequently Asked Questions.
How are AfCFTA legal instruments adopted and how do they enter into force?
Potential Cross Border Value Chain Involvement infographic
The Agribusiness Value Chain in Africa infographic
AfCFTA Institutions infographic
Simplified Trade Regimes and Women Traders in Africa
Making the AfCFTA NTB mechanism work for women traders
Investment and Gender in the AfCFTA
Gender and Digital Trade in the AfCFTA
Architecture of the AfCFTA Protocol on Women and Youth in Trade
AfCFTA Tariff Negotiations: Who negotiates with whom?
How flexible and effective will the AfCFTA be
What to expect from the AfCFTA Dispute Settlement Mechanism
The Framework for the Implementation of the AfCFTA
How will the AfCFTA protect the Rights of Private Parties
The Obligations to be implemented by the AfCFTA State Parties
The AfCFTA Agreement’s Annexes that deal with Customs and border management
According to Article 23 of the AfCFTA Agreement, entry into force occurs 30 days after the 22nd instrument of ratification is deposited with the Chairperson of the African Union Commission (AUC) – the designated depositary for this purpose – an essential step for the AfCFTA to enter into force. The Agreement entered into force on 30 May 2019 for the 24 countries that had deposited their instruments of ratification before this date.
As at August 2023, 47 of the 54 signatories (85%) have deposited their instruments of AfCFTA ratification with the AUC Chairperson.
Rules of Origin and tariff offers
The AfCFTA will see the progressive liberalisation of 97% of intra-Africa tariffs on trade in goods, 7% of which are categorised as covering ‘sensitive products’. These will be liberalised over a longer timeframe. The remaining 3% of tariffs may be excluded from liberalisation for reasons relating to food security, national security, fiscal revenue, livelihood, and industrialisation. Non-Least Developed Countries will liberalise tariffs on non-sensitive goods over a period of 5 years and LDCs over 10 years. As at August 2023, 43 tariff offers on trade in goods have been submitted by individual State Parties (Malawi, Mauritius, and São Tomé and Príncipe) and collectively as part of Customs Unions – CEMAC, EAC, ECOWAS and SACU, 29 of which had been technically verified.
AfCFTA comparative tariff offer analysis
Rules of origin (the legal provisions that are used to determine the economic nationality of a product in the context of international trade) must also be agreed. Negotiations on tariffs and rules of origin are yet to be completed. Agreed RoO currently cover 87.7% of tariff lines. Trade in goods, for which RoO are finalised, can take place under the tabled tariff offers. These offers must comply with the agreed modalities for tariff negotiations.
AfCFTA Rules of Origin Manual, Vol. 1, July 2022
Introduction to the AfCFTA RoO: Key provisions, sectoral approach and outstanding issues
Interpreting the rules | Key sector outcomes
Guided Trade Initiative (GTI)
While preferential trade under the AfCFTA can only truly begin once negotiations on issues such as tariff concessions and rules of origins are finalised, a ‘pilot phase’ of the AfCFTA was launched in October 2022 in the form of the Guided Trade Initiative (GTI). The primary aim of the GTI is to test the operational, institutional, legal and trade policy environment under the AfCFTA.
Eight (8) State Parties representing the five regions of the continent – Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia – are currently participating in the initiative. The GTI will be expanded in 2023 to include more products and participants, and a similar pilot for trade in services is also planned.
tralac has prepared a special Trade Brief introducing the AfCFTA Secretariat’s Guided Trade Initiative: How will it work and where does trade under AfCFTA rules now stand?
The institutional framework for the implementation, administration, facilitation, monitoring and evaluation of the AfCFTA consists of the following:
Assembly of Heads of State and Government of the African Union (AU) – provides oversight and strategic guidance on the AfCFTA, including the Action Plan for Boosting Intra-African Trade (BIAT).
Council of Ministers (CoM) – consists of the Ministers for Trade (or other designated Ministers) of the State Parties. The mandate of the Council of Ministers is to take decisions in accordance with the AfCFTA Agreement; ensure effective implementation and enforcement of the Agreement; and take measures necessary for the promotion of the objectives of this Agreement and other instruments relevant to the AfCFTA.
Committee of Senior Trade Officials – consists of Permanent or Principal Secretaries or other officials designated by each State Party. It shall implement the decisions of the Council of Ministers, be responsible for the development of programmes and action plans, monitor implementation, and ensure proper functioning and development of the AfCFTA. It reports to the Council of Ministers.
AfCFTA Secretariat – the only permanent institution of the AfCFTA based in Accra, Ghana. Its mandate is to implement instructions of the CoM and provide technical assistance to the State Parties and AfCFTA institutions, as provided in the AfCFTA Agreement.
Dispute Settlement Mechanism of the AfCFTA – replicates, with the necessary adaptations, the WTO dispute settlement system. The relevant principles and procedures appear in a dedicated Protocol. The Dispute Settlement Mechanism has its own institutions, such as the Appellate Body and the Panels. Only State Parties may bring disputes against other State Parties.
In addition, various technical committees have been established to assist with the implementation of the Agreement. The committees will comprise designated representatives from State Parties.
tralac has followed developments in the AfCFTA negotiations with keen interest. Below is our collection of legal documents and resources, including the text of the AfCFTA Agreement, its Protocols and its Annexes.