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Africa Continental Free Trade Area (AFCFTA)

Overview

The Africa continental free trade area (AFCFTA) is the world’s largest free trade area bringing together the 55 member states of Africa union (AU) and (8) regional economic communities (REC) to create a single market for the continent.

The aim is to enable the free flow of goods and services across the continent and boost the trading position of Africa in the global market.

 

AfCFTA Contributions to the African Economy.

It is to estimate 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 also reduced.

With the average tariffs of 6.12 percent business currently face higher tariffs when they export with in Africa than on the continent.

The AfCFTA will progressively eliminate tariffs on intra-Africa trade. Making it easier for Africa in businesses to trade within the continent and benefit from the growing African market.

The AfCFTA is expected to expand the size of Africa’s, economy to US 29 trillion 2050.

 

Trade in goods

One of the specific objective of the AFCFTA Agreement is the progressive liberalization of services, the Afcfta protocol on trade in services envision liberalized Africa services market which shall be achieved by gradually eliminating restriction that incompatible with the afcfta agreement, the AfCFTA protocol on trade in service, the negotiating guidelines for services negotiating under the Afcfta protocol on trade in services

First, by the state parties offering their commitment in service sector through schedule of the specific commitments.

Second, by developing cross cutting sectorial regulatory framework.

Dispute Settlement Mechanism

The Dispute settlement mechanism established under the protocol on Rules and procedures of the AFCFTA Agreement. It focuses on amicable, transparent and swift resolutions of disputes between states parties. The key institutions of the Disputes settlement mechanism are the dispute settlement body, the adjudicating panels and to appellate body for second-tier review.

 

Dispute Settlement Body (DSB)

The dispute settlement body comprises state parties. The body adopts the reports of the panels and the appellate body and ensures that the rulings and recommendations are upheld

Adjusting Panels

The members of the Adjudicating panels are selected from an indicative list.

The panel comprises of competent individuals with experience in law, International trade, and other matters covered by the Agreement. Each state party nominates two individuals to the indicative list maintained by Afcfta secretariat.

 

Appellate Body

The Appellate Body of the Agreement is the tribunal of a final instance, it upholds, modifies or reversals the legal findings and conclusions of the Adjudicating panel. Generally, if a party disagrees with any aspect of a panel report, it may appeal to the appellate body for redress. Once the dispute by the appellate body, they become legally binding on the disputing parties.

The Appellate body comprises seven person of recognized authority with demonstrated expertise in Law, International trade and the subject matter of the Agreement.

In addition to the attribution process featuring the dispute settlement body, adjudicating panel, and the appellate body, state parties may also choose to settle disputes through the office of the secretary general or conciliation and mediation.

 

Customs and Trade Facilitation

In a free trade area, such as AFCFTA customs administrations play an essential role in developing and promoting intra-Africa trade through the effective implementation of the agreed tariff offers, rules of origin and proper management of the borders. The Directorate also simplifies and harmonies customs law and procedures the supervision transhment, ensures customs cooperation among others.

The Directorate therefore facilitates the enforcement of the agreed rules among state parties.

Purposes of the AFCFTA

  • 3+ Billion people in the continent of Africa
  • 4 + Trillion GDP.
  • 55 member states of Africa
  • 1 market.

 

Objectives of AFCFTA

  1. Create a single market for goods and services, facilitated by movement of person in order to deepen the economic integration of Africa continent in accordance with Pan-African vision of an integrated, prosperous and peaceful Africa “enriched in Agenda 2063.
  2. Create liberalized market for goods and services through successive rounds of negotiations.
  3. Contribute the movement of capital and natural persons and facilitate investments building on the initiatives and development in the state parties and REC’s.
  4. Lay the foundation for the establishment of continental customs union at large scale.
  5. Promote and attain sustainable and inclusive socio-economic development gender equality and structural transformation of the state parties.
  6. Enhance the competitiveness of the economies of state parties with in the continent and the global market.
  7. Promote industrial development through diversification and regional value chain development, Agricultural development and food security.
  8. Resolve the challenges of the multiple and overlapping memberships and expedite the regional and continental integration process.

 

AFCFTA

The implementation of Afcfta is supported through the establishment and operationalization for four oversight Institutions.

  • The council of ministers
  • The AFCFTA secretariat
  • The committee on trade in goods.
  • The committee on trade in service.

 

At country level, several examples support the progress registered at continental level. The kingdom of Eswatini for example, In pursuit of Africa’s political and economic integration is an active member of the African continental free trade area (AFCFTA).currently there are no Nontariff barriers (NTB) reported against the country.

However, At the EAC and COMESA levels, 15 NTBs and 9 NTBs respectively were reported by June 2021.

Between 2007 and 2021 cumulatively, 226 NTBs were resolved at EAC level, while I NTBs was resolved in 2021 at the COMESA Level.