African Continental Free Trade Agreement (AfCFTA): Status Update for Business Stakeholders and the Private Sector

On 21 March 2018, member states of the African Union met and signed the African Continental Free Trade Area. 52 out of 55 countries have signed. 18 ratifications (10 deposited with the AU and 8 have completed the Parliamentary processes). 22 ratifications for the agreement to enter into force.

However, it is important to note that the agreement that was signed is not the complete agreement but rather the skeletal framework outlining general provisions. Specific details on the main aspects that form the agreement and will realize the trading opportunities are still outstanding. These include:

  • Schedule of Tariff Concessions – State parties have yet to develop and submit their schedule of concessions for trade in goods. Parties have agreed to a 90% basket of goods to be liberalised and 10% for sensitive products which are to be liberalised over a longer period.
  • Rules of Origins – Specific details relating to rules of origins have not been concluded. Parties are still to develop and submit their lists of product-specific rules of origin, including goods obtained from Special Economic Zones.
  • Dispute settlement – agreeing to a mechanism for dispute settlement.
  • Secretariat – To adopt the structure, budget, location (country) and organogram of the AfCFTA Secretariat.
  • Services – schedule to be developed and submitted.

Countries to watch when the agreement enters into force:

These are the top ten countries with the highest percentage in intra-African trade (exporters). They are not in any specific order.

Countries Existing Membership of Regional Groups AfCFTA Status Share of Intra-African Exports
1.     South Africa SADC, SACU SADC EPA Ratified 27.63%
2.     Nigeria ECOWAS, CENSAD Did not sign 8.36%
3.     Gabon ECCAS Signed 7.39%
4.     Egypt CENSAD, COMESA Signed 5.73%
5.     Angola ECCAS, SADC Signed 4.53%
6.     Ivory Coast CENSAD, ECOWAS Ratified 3.88%
7.     Zimbabwe SADC, COMESA Signed 3.51%
8.     Tanzania EAC, SADC Did not sign 3.05%
9.     Morocco UMA, CENSAD Signed 3.04%
10.  Kenya EAC, IGAD, COMESA, CENSAD Ratified 2.80%
Top 10 Total 69.92% Total Trade

Source: African Trade Statistics Yearbook 2017.

Latest Update: 2019/03/20

  • 0n 21 March 2018, member states of the African Union met and signed the African Continental Free Trade Area. Not all countries signed and ratified the agreement: 52 out of 55 countries have signed, and with 20 that have ratified the agreement. Of the 20 that have ratified, 15 deposited their instruments of ratification with the AU, and 4 have completed the parliamentary process but yet to ratify. In order for the agreement to enter into force, 22 ratifications are required.
  • Schedule of Tariff Concessions – The summit of January 2019 finalised the sensitive products by agreeing to 7% sensitivities and 3% exclusions. This paves the way for countries to embark on preparing tariff offers in line with the modalities by June 2019.
  • Rules of Origins – Still under negotiation. Some states want stricter rules of origin and some want flexible rules of origin. In addition, member states are yet to develop a strategy for special economic zones. Negotiations for special economic zones will commence soon. The initial deadline for the negotiations has passed and new deadline is set for mid-year 2019. However, at the pace that negotiations have been going, this year’s deadline may be missed.
  • Secretariat – At the January Summit of 2019, the leaders agreed to hold an extraordinary summit in Niamey, Niger in July 2019. The purpose of the summit will be to decide on the Secretariat of the CFTA – particularly its location and structure. Ghana and eSwatini have expressed interest to host the institution.

Countries to watch when the agreement enters into force are listed below according to GDP size. The table also includes data on the countries with the highest percentage in intra-African trade (exporters and importers).

Countries AfCFTA Status GDP in US dollars % exports % imports
Nigeria Did not sign 397 8.36% 2.86%
South Africa Ratified 376 27.63% 12.93%
Egypt Ratified 249 5.73% 3.99%
Algeria   188 2.14% 2.38%
Morocco Signed (cabinet approval) 118 3.04% 2.66%
Angola Signed 114 4.53% 1.57%
Kenya Ratified 90 2.80% 2.28%
Ethiopia Signed (Parliament approval) 84 * *
Tanzania Did not sign 55 3.05% 1.63%
Ghana Ratified 52 2.32% *
         

Source – African Trade Statistics Yearbook 2017 and IMF Map Data.

*not listed in the data captured of the 22 major intra-African trade importers and exporters.

 

The share of total Africa-Exports (%), 2017 (only showing UN Comtrade reported data)


Source: UN Comtrade, 2019

Share of total Africa-Imports (%), 2017 (only showing UN Comtrade reported data)


Source: UN Comtrade, 2019

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