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Although initially set to be operational by 2021, the African Continental Free Trade Area (AfCFTA) is still facing challenges for its full implementation. However, 41 of the 54 African countries have met the conditions required for the agreement's operationalisation.
In an effort to push forward its implementation, three international institutions— the Enhanced Integrated Framework (EIF), the United Nations Economic Commission for Africa (UNECA) and the International Islamic Trade Finance Corporation (ITFC)—have pledged their support to help African countries make the AfCFTA operational. This announcement was made public in a press release published on UNECA’s website on 10 March 2022.
Eight countries are set to benefit from this support, which involves the implementation of approximately 30 activities. These countries include Burkina Faso, Côte d'Ivoire, Guinea, Mauritania, Niger, Senegal, Togo, and Tunisia. According to the information note, the initiative aims to "create an environment where trade can be more efficient and inclusive in the eight beneficiary countries."
The goal is to enhance the capacities of these nations by fostering "jobs and other economic opportunities."
"This joint project has the potential to increase regional trade levels from 18% to 25% within a decade. With proper implementation, it could also result in a $10 billion reduction in imports from outside the region, while boosting agricultural and industrial exports by up to $45 billion (7%) and $21 billion (5%) annually," explained Vera Songwe, UN Under-Secretary-General and Executive Secretary of the Economic Commission for Africa (ECA).
The AfCFTA has already garnered strong international support. The United States, through the US-Africa Business Council, has expressed its intention to attract investment into a more unified African market. Additionally, organizations such as the United Nations Development Programme (UNDP) and the African Development Bank (AfDB) are also supporting the initiative.
Once fully implemented, the AfCFTA will eliminate customs duties on 97 tariff lines over a 13-year period, which began on 1 January 2021. This will establish the largest free trade area since the formation of the World Trade Organization (WTO).
Credit: AgenceEcofin