What Is Africa Free Trade Agreement

The Africa Continental Free Trade Agreement (AfCFTA) is a historic agreement that was signed by 54 of the 55 African Union (AU) member states in March 2018, with Eritrea being the only nation that has not signed. It is set to create a single market for goods and services across the African continent.

The AfCFTA aims to increase intra-African trade by creating a free trade area that will encompass a market of 1.2 billion people with a combined GDP of more than $2.5 trillion. The agreement is expected to reduce tariffs on goods and services, facilitate the movement of people and increase investment and business opportunities for African businesses.

The agreement has the potential to boost economic growth on the continent and create jobs, as well as increase competitiveness by reducing the cost of doing business in Africa. It is also expected to increase the diversification of African economies, as countries will be able to specialize in areas where they have a comparative advantage.

The AfCFTA will be implemented in phases, with the first phase focusing on the reduction of tariffs on goods. The second phase will focus on the liberalization of services and the movement of people, while the third phase will deal with intellectual property rights and competition policy.

The agreement also includes provisions for special and differential treatment for least developed countries, landlocked countries and small island developing states, to ensure that they are not left behind in the process of integration.

However, there are concerns that the AfCFTA may lead to some countries losing out in terms of revenue and employment, particularly those countries that rely heavily on tariffs on imports for government revenue. There are also concerns about the potential for increased competition from more advanced economies and the need for infrastructure development to support increased trade and investment.

In conclusion, the Africa Continental Free Trade Agreement is a significant step towards greater economic integration and growth in Africa. While there are challenges to be faced, the potential benefits are enormous, and it is hoped that the agreement will lead to greater prosperity for the people of Africa.

Scroll to Top