Global trade has witnessed drastic changes in the last two decades. The world
trade paradigm has been increasingly marked by trade integration and the
immense use of unilateral trade measures. It is by no surprise that the African
Union (AU) Assembly of Heads of State and Heads of Government in 2012 saw
the urgent need to create a continental free trade agreement, which essentially
aims to reposition the African continent for improved intra-African trade as
well as improving its trade with the rest of the world. The creation of African
Continental Free Trade Agreement (AfCFTA) through series negotiations on the
liberalisation of trade in goods and services in Africa, represents an ideal measure
and a unique collaborative effort by African countries to bolster regional and
continental economic integration.
The AfCFTA is of major significance for the African continent. The framework
for the establishment of the AfCFTA together with three Protocols (on trade
in goods, trade in services and dispute settlement) was adopted by 44 African
countries at the AU Assembly on 21 March 2018 in Kigali, Rwanda. Effectively,
the AfCFTA entered into force on 30 May 2019, after the condition for the deposit
of a minimum of 22 instruments of ratification was met. On July 8, 2019, Nigeria
signed up to the AfCFTA. At the achievement of the recent milestone, the AfCFTA
becomes one of the flagship projects of the First Ten Year Implementation Plan
under the African Union (AU) Agenda.
The initiative presents major opportunities to boost intra-African trade.
Some of its objectives aim to create a single continental market for goods and
services, with free movement of business persons and investments, as well as
enhance competitiveness at the industry and enterprise level through exploiting
opportunities for scale production, continental market access and better
reallocation of resources. There is no doubting the claims that the AfCFTA can
support the realisation of the continent’s economic progress. It is expected to be
a game-changer for Africa and a key engine of economic growth, industrialization
and sustainable development of the entire continent
With these expectations, proponents have projected various impact that
AfCFTA would have on the African continent. Many of the projected estimates
have painted a rosy picture of African-wide benefit of AfCFTA. For instance, the
IMF projected that, with full implementation of AfCFTA, intra-African trade will
rise from $50 billion to $70 billion by 2040, compared to an Africa without the
agreement. The line of argument is that the implementation of AfCFTA will
ultimately lead to more efficient goods and labour markets in Africa and in turn,
such development will significantly increase the continent’s overall ranking on
the Global Competitiveness Index. In a report published by Brookings Institute,
it has been estimated that Africa will have a combined consumer and business
spending of $6.7 trillion in 2030 as a result of the implementation of AfCFTA.
