CHAPTER 6
The Promise and Challenge of the African Continental Free Trade Area Woubet Kassa, Habtamu T. Edjigu, and Albert G. Zeufack
Introduction In January 2012, the 18th Ordinary Session of the African Union Assembly of Heads of State and Government decided to establish the African Continental Free Trade Area (AfCFTA) by an indicative date of 2017. The summit also endorsed the Action Plan for Boosting Intra-African Trade, which identified seven program clusters: trade policy, trade facilitation, productive capacity, trade-related infrastructure, trade finance, trade information, and factor market integration. The AfCFTA aims to bring together 54 African countries with a combined population of more than 1.2 billion people and a combined gross domestic product (GDP) of more than $3 trillion. The goal is to “create a single continental market for goods and services, with free movement of business persons and investments.”1 The draft agreement was signed in March 2018 during the 18th Extraordinary Session of the African Union Assembly of Heads of State and Government, where 44 of the 55 African countries signed the treaty. As of 2021, 54 countries had already signed the AfCFTA.2 Twenty-two ratifications were required for the agreement to enter into force—a feat achieved as of May 2019—and 38 African Union member states have ratified it as of August 2021. Hence, Africa has put into operation the world’s largest free trade area (FTA), which is expected to change the trade and investment framework of countries in the region. The key objectives of AfCFTA include the following:3 • Create a single continental market for goods and services, with free movement of businesspersons and investments, and thus pave the way for accelerating the establishment of a Continental Customs Union. • Expand intra-Africa trade through better harmonization and coordination of trade liberalization and facilitation regimes and instruments 245
