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18 Jun 2019
BY Celia Becker

African Continental Free Trade Area Agreement enters into force

The African Continental Free Trade Agreement (“AfCFTA”) entered into force on 30 May 2019 following the approval by the minimum required 22 countries.

The AfCFTA will be the world’s largest free trade zone formed after the World Trade Organization, covering a market of 1.2-billion people. The agreement is expected to boost regional trade through the reduction of tariffs and ultimately increasing intra-African trade by about 60%, having a major impact on intra-African cooperation, industrial development, manufacturing, tourism and economic transformation. 

The agreement was brokered by the African Union (“AU”) and signed by 44 of its member states in Kigali, Rwanda on March 21, 2018. It has since then been endorsed by 52 African countries excluding Nigeria, Eritrea and Benin, and is expected to pave the way for establishing the Continental Customs Union and the African Customs Union. 

The agreement initially requires members to remove tariffs from 90% of goods, allowing free access to commodities, goods, and services across the continent. The operational phase of the agreement will come into effect after the AU Summit in July 2019, with several institutions to be created to facilitate the implementation of the free trade area.

The AU and the African Ministers of Trade have been tasked with finalising the supporting instruments of the agreement, which include the rules of origin, schedules of tariff concessions on trade in goods, online non-tariff barriers monitoring and elimination mechanism, digital payments and settlement platform and an African Trade Observatory Portal.

Negotiations relating to the AfCFTA protocols on trade in goods and services are at an advanced stage, however, commitments on tariff schedules, rules of origin, and specific services sector commitments are yet to advance.