African Continental Free Trade Area
The African Continental Free Trade Area (AfCFTA) is a free trade area encompassing most of Africa. It was established in 2018 by the African Continental Free Trade Agreement, which has 43 parties and another 11 signatories, making it the largest free-trade area by number of member states, after the World Trade Organization, and the largest in population and geographic size, spanning 1.3 billion people across the world's second largest continent.
African Continental Free Trade Area logo Status as of May 3, 2022
Ratifying parties
Signed March 2018, not ratified
Signed July 2018 or later, not ratified | |
| Type | Free-trade area |
|---|---|
| Signed | March 21, 2018 |
| Location | Kigali, Rwanda |
| Effective | May 30, 2019 |
| Condition | Ratification by 22 states |
| Original signatories | 44 states
|
| Signatories | 10 additional states
|
| Parties | 47 states
|
| Depositary | African Union Commission |
| Languages | Arabic, English, French, Portuguese, Spanish, Swahili |
The agreement founding AfCFTA was brokered by the African Union (AU) and signed by 44 of its 55 member states in Kigali, Rwanda on 21 March 2018. The proposal was set to come into force 30 days after ratification by 22 of the signatory states. On 29 April 2019, the Saharawi Republic made the 22nd deposit of instruments of ratification, bringing the agreement into force on May 30; it entered its operational phase following a summit on 7 July 2019, and officially commenced 1 January 2021. AfCFTA's negotiations and implementation are overseen by a permanent secretariat based in Accra, Ghana.
Under the agreement, AfCFTA members are committed to eliminating tariffs on most goods and services over a period of 5, 10, or 13 years, depending on the country's level of development or the nature of the products. General long-term objectives include creating a single, liberalised market; reducing barriers to capital and labor to facilitate investment; developing regional infrastructure; and establishing a continental customs union. The overall aims of AfCFTA are to increase socioeconomic development, reduce poverty, and make Africa more competitive in the global economy.
On January 13, 2022, the AfCFTA took a major step towards its objective with the establishment of the Pan-African Payment and Settlement System (PAPSS), which allows payments among companies operating in Africa to be done in any local currency.
In April 2024, the African Union announced that the AfCFTA entered into its operational phase of the agreement. The operational phase, which effectively puts the agreement into force, is characterized by the following actions:
- Establishment of the rules of origin, which will govern the conditions a product or service can be traded duty free;
- Tariff concessions, 90% tariff liberalisation;
- Online mechanism, allows members to report non-tariff barriers;
- Pan-African payment and settlement system, allows certainty of payments and will instill confidence in the system
- African Trade Observatory, a portal to address hindrances to trade, will be provided by AU member states.