Frequently Asked Questions

LATEST NEWS

Activity Reports

Useful links

According to Agenda 2063, the flagship project of the African Union (AU) is the African Continental Free Trade Area (AfCFTA). It provides a strategic framework developed by member states to achieve the AU’s goal of inclusive and sustainable development. Its purpose is to create an integrated market for the trade of goods and services, as well as for the free movement of people and capital.

 

According to Article 23 of the Agreement establishing the African Continental Free Trade Area (AfCFTA), entry into force occurs 30 days after the deposit of the 22nd instrument of ratification with the Chairperson of the African Union Commission (AUC) – the designated depositary. The Agreement entered into force on May 30, 2019, for the 24 countries that had deposited their instruments of ratification by that date

The terms ‘State Parties’ and ‘Member States’ are used in the AfCFTA agreement. ‘Member States’ are the countries that are members of the AU. AU Member States that have ratified or acceded to the AfCFTA agreement and for which it is in force are called ‘State Parties’. Under the AfCFTA agreement, only State Parties have rights and obligations. Ongoing negotiations involve both State Parties and non-Party States. AU Member States that have not ratified the AfCFTA are called ‘Non-Party States’

As the largest trade pact among African countries, the AfCFTA is expected to:

  • Eliminate trade barriers among members, allowing businesses to trade more easily across Africa and benefit from their own growing market;
  • Introduce regulatory measures such as health standards and the removal of non-tariff barriers to trade;
  • Establish a liberalized market for goods and services;
  • Facilitate capital flows;
  • Encourage investments by creating a large market;
  • Promote the introduction of new technologies to boost productivity;
  • Increase the competitiveness of member economies;
  • Promote industrial development through diversification; and
  • Develop value-added systems for products.

African SMEs represent a key target for the AfCFTA, as they can benefit from better access to new markets and the potential economic transformation that competition in these areas could foster. The agreement offers several advantages to African MSMEs, which is crucial given their importance in the continent’s economy, representing up to 80% of businesses and up to 40% of national GDP.

These benefits include:

  • Promoting specialization and accelerating industrialization;

  • Expanding employment and investment opportunities;

  • Advancing technological development;

  • Allowing African-owned businesses to enter new markets, expand their customer base, and develop new goods and services;

  • Bridging the manufacturing gap;

  • Providing MSMEs with more opportunities to create well-paying jobs, especially for young people;

  • Stimulating investments that provide liquidity to local businesses;

  • Streamlining the import process of raw materials from other African nations;

  • Enabling MSMEs to establish assembly businesses in other African countries to provide more cost-effective production methods.”