Operational phase of the African Continental Free Trade Area launched

|Published 10:35 AM ET, Wednesday March 12, 2025|

The operational phase of the African Continental Free Trade Area (AfCFTA) was officially launched on July 7, 2019, during the 12th Extraordinary Summit of the African Union (AU) in Niamey, Niger. This marked a significant milestone in Africa’s economic integration efforts.

Key Highlights of the Launch:

1. Adoption of Key Instruments
   Several operational instruments were adopted to facilitate the implementation of the AfCFTA, including:

   • Rules of Origin: Criteria to determine the nationality of a product.
   • Tariff Concessions: Framework for tariff reductions and eliminations.
   • Online Mechanisms: Digital tools to facilitate trade (e.g., the Pan-African Payment and Settlement System).
   • African Trade Observatory: A trade information portal.
   • Continental Online Mechanism for Reporting Non-Tariff Barriers: A system to resolve trade barriers.

2. Commencement of Trading (January 1, 2021)
   Though the agreement was signed in 2018 and operationalized in 2019, actual trading under the AfCFTA framework began on January 1, 2021.

3. Participation

   • 54 out of 55 AU member states have signed the AfCFTA agreement.
   • 47 countries have ratified it as of 2024.
   • Eritrea remains the only AU country yet to sign.

4. Objectives

   • Establish the largest free trade area in the world, covering 1.4 billion people.
   • Boost intra-African trade by reducing tariffs on 90% of goods.
   • Facilitate industrialization, job creation, and economic diversification.
   • Strengthen Africa’s bargaining power in global trade.

Significance of the Operational Phase

• The launch provided a concrete framework for trade liberalization and economic integration.
• It marked the shift from negotiations to actual implementation of the trade agreements.
• It set the stage for African businesses and investors to benefit from a single market.

As of March 2025, the African Continental Free Trade Area (AfCFTA) has made notable progress in its implementation and impact across the continent:​

1. Expansion of Membership and Ratifications

• 54 out of 55 African Union (AU) member states have signed the AfCFTA agreement, with 48 countries having ratified it as of August 2024. Eritrea remains the only AU member state yet to sign the agreement. ​

2. Commencement of Trading

• Trading under the AfCFTA framework officially began on January 1, 2021, marking a significant step toward enhancing intra-African trade. ​

3. Impact on Intra-African Trade

• The AfCFTA aims to increase intra-African trade by reducing tariffs and streamlining customs procedures. The World Bank projects that the agreement could boost Africa’s income by $450 billion by 2035 and lift 30 million people out of extreme poverty. ​

4. Infrastructure Development and Energy Sector Growth

• The AfCFTA has spurred investments in infrastructure, particularly in the energy sector. The agreement facilitates cross-border energy projects and aims to modernize trade laws, promoting infrastructure development. This positions countries like South Africa, Nigeria, and Egypt to expand their energy exports while boosting intra-African trade. ​

5. Challenges in Free Movement

• Despite progress in trade, challenges remain in the free movement of people across the continent. Extensive visa requirements and bureaucratic hurdles hinder intra-African travel, affecting trade and cultural exchange. Efforts are ongoing to address these issues through protocols like the Free Movement of Persons Protocol, but as of January 2025, only a small number of countries have ratified these agreements. ​

The AfCFTA continues to be a transformative initiative, aiming to create a single market for goods and services across Africa, thereby fostering economic integration, industrialization, and sustainable.

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