Implementation and Benefits of AfCFTA

The African Continental Free Trade Agreement  (AfCFTA) is a free trade area founded in 2018, with trade commencing as of 1 January 2021. It was created among 54 of the 55 African Union nations. 

The main objective of the AfCFTA is to create a single market for goods and services to facilitate the free movement of persons and investments and to lay the foundation for a Continental Customs Union.

The implementation and benefits of AfCFTA

  • Create a single market. The main objective is to create a single market for goods and services to increase trade between African nations. The AfCFTA is tasked with implementing protocols to remove barriers to trade and working with member states on investment and competition policies, intellectual property rights, dispute resolution, and other free trade strategies.

  • Expected economic recovery and commercial diversity. It is estimated that the The African Continental Free Trade Agreement will increase intra-African trade by 52.3% once import tariffs and non-tariff barriers are removed. 

  • Collaboration and compliance structure. The Council complies with decisions related to the Agreement.

  • Abolition of tariffs. Contracting states will gradually abolish import duties and apply preferential tariffs to imports from other contracting states. If contracting states are party to regional trade agreements to which preferential tariffs already apply, contracting states must maintain and improve them.

  • Resolution of commercial disputes. Multilateral trading systems can lead to disputes if one contracting state implements a trade policy that another contracting state considers a violation of the agreement. The AfCFTA has established the dispute resolution mechanism for such occasions, which offers mediated consultations between the disputing parties. The mechanism is only available to contracting states, not to private companies.

  • Promotion of industrialization. The AfCFTA promotes competitive manufacturing. With a successful implementation of this new business initiative, there is a chance that Africa’s manufacturing sector will double in size from $ 500 billion in 2015 to $ 1 trillion in 2025 and create 14 million stable jobs.

  • Contribution to sustainable growth. The United Nations 2030 Agenda for Sustainable Development contains goals to which the AfCFTA contributes. For example, Goal 8 of the Agenda is decent work and economic growth and Goal 9 is to promote the industry. The AfCFTA initiative also contributes to Goal 17 of the Agenda by reducing the continent’s dependence on external resources and promoting independent financing and development.

Conditions of Success 

Successful implementation of the AfCFTA depends on the political will and commitment of member states and their leaders.Fully implementing the agreement itself involves the acceptance of a number of requirements at both the state and continental levels. 

For the AfCFTA to be successful, political leaders must embrace: 

  1. Sensitivity to non-tariff barriers to trade, including governance, infrastructure and border crossings, and the expansion of informal trade; 
  2. Enhanced cross-border trade tracking; 
  3. Coordination of the harmonization of trade policy in national and regional economic communities, continental and global trade agreements; 
  4. and Coordination mechanism for handling commercial disputes.

Providing a simplified supply chain 
African Gabions welcomes the ratification of the AfCFTA by the African Union and is fully committed to providing partners across the continent a simplified supply chain of gabions baskets and other civil engineering products delivered to your site anywhere in Africa. View our products or contact us.