African Continental Free Trade Agreement

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African Continental Free Trade Agreement (AfCFTA)
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Status as of 7 July 2019
  Ratifying parties
  Signed March 2018, not ratified
  Signed July 2018 or later, not ratified
TypeTrade agreement
Signed21 March 2018
LocationKigali, Rwanda
Effective30 May 2019
ConditionRatification by 22 states
Original
signatories
Signatories
Parties
DepositaryAfrican Union Commission
LanguagesEnglish, French, Portuguese, Arabic, Spanish

The African Continental Free Trade Agreement (AfCFTA) is a trade agreement which is in force between 27 African Union member states.[1][8][9][10] It was signed in Kigali, Rwanda, on 21 March 2018. As of July 2019, 54 states have signed the agreement.[11] Ratification by 22 countries was required for the AfCFTA to enter into force and the African Continental Free Trade Area to become effective. The agreement will function as an umbrella to which protocols and annexes will be added.

Negotiations continued in 2018 with Phase II, including Competition Policy, Investment and Intellectual Property Rights. A draft shall be submitted for the January 2020 AU Assembly.[12]

Kenya and Ghana were the first countries to deposit the ratification instruments on 10 May 2018, after ratification through their parliaments.[2] With ratification by Sierra Leone and the Sahrawi Republic on 29 April 2019, the threshold of 22 ratifying states for the free trade area to formally exist was reached.[7] As a result, the AfCFTA came into force on 30 May 2019. Outstanding issues like the trade concession agreements and rules of origin remain under negotiation. On 7 July 2019, at a summit in Niger, the AfCFTA entered its operational phase.[13][14]

History[edit]

Background[edit]

In 1963, the Organization of African Unity (OAU) was founded by the independent states of Africa. The OAU aimed to promote cooperation between African states. The 1980 Lagos Plan of Action was adopted by the organization. The plan suggested Africa should minimize reliance upon the West by promoting intra-African trade. This began as the creation of a number of regional cooperation organizations in the different regions of Africa, such as the Southern African Development Coordination Conference. Eventually this led to the Abuja Treaty in 1991, which created the African Economic Community, an organization that promoted the development of free trade areas, customs unions, an African Central Bank, and an African common currency union.[15][16]

In 2002, the OAU was succeeded by the African Union (AU), which had as one of its goals to accelerate the "economic integration of the continent".[17] A second goal was to "coordinate and harmonize the policies between the existing and future Regional Economic Communities for the gradual attainment of the objectives of the Union."[18] At the 2012 African Union summit in Addis Ababa, leaders agreed to create a new Continental Free Trade Area by 2017. At the 2015 AU summit in Johannesburg, the summit agreed to commence negotiations. This began a series of ten negotiating sessions which took place over the next three years.[15][19]

2018 Kigali Summit[edit]

In 2018, at the 10th Extraordinary Session of the African Union on AfCFTA, three separate agreements were signed: the African Continental Free Trade Agreement, the Kigali Declaration; and the Protocol on Free Movement of Persons. The Protocol on Free Movement of Persons seeks to establish a visa-free zone within the AfCFTA countries, and support the creation of the African Union Passport.[20] At the summit in Kigali on 21 March 2018, 44 countries signed the AfCFTA, 47 signed the Kigali Declaration, and 30 signed the Protocol on Free Movement of People. While a success, there were two notable holdouts: Nigeria and South Africa, the two largest economies in Africa.[21][22][23]

One complicating factor in the negotiations was that Africa had already been divided into eight separate free trade areas and/or customs unions, each with different regulations.[note 1] These regional bodies will continue to exist; the African Continental Free Trade Agreement initially seeks to reduce trade barriers between the different pillars of the African Economic Community, and eventually use these regional organizations as building blocks for the ultimate goal of an Africa-wide customs union.[15][23][24][25]

Declarations signed at the 2018 Kigali summit[26]
Country Signed By afCFTA Consolidated Text (signature) Kigali Declaration Free Movement Protocol
 Algeria Prime Minister Ahmed Ouyahia Yes Yes No
 Angola President João Lourenço Yes Yes Yes
 Central African Republic President Faustin Archange Touadéra Yes Yes Yes
 Chad President Idriss Déby Yes Yes Yes
 Comoros President Azali Assoumani Yes Yes Yes
 Djibouti President Ismaïl Omar Guelleh Yes Yes No
 Equatorial Guinea Prime Minister Francisco Pascual Obama Asue Yes Yes Yes
 Eswatini Prime Minister Barnabas Sibusiso Dlamini Yes Yes No
 Gabon President Ali Bongo Ondimba Yes Yes Yes
 Gambia President Adama Barrow Yes Yes Yes
 Ghana President Nana Akufo-Addo Yes Yes Yes
 Ivory Coast Vice President Daniel Kablan Duncan Yes No No
 Kenya President Uhuru Kenyatta Yes Yes Yes
 Lesotho Prime Minister Tom Thabane No Yes Yes
 Mauritania President Mohamed Ould Abdel Aziz Yes Yes Yes
 Morocco Prime Minister Saadeddine Othmani Yes No No
 Mozambique President Filipe Nyusi Yes Yes Yes
 Niger President Mahamadou Issoufou Yes Yes Yes
 Republic of the Congo President Denis Sassou Nguesso Yes Yes Yes
 Rwanda President Paul Kagame Yes Yes Yes
 Sahrawi Arab Democratic Republic President Brahim Ghali Yes Yes No
 Senegal President Macky Sall Yes Yes Yes
 Seychelles Vice President Vincent Meriton Yes Yes No
 South Africa President Cyril Ramaphosa No Yes No
 Sudan President Omar al-Bashir Yes Yes Yes
 Tanzania Prime Minister Kassim Majaliwa No Yes No
 Uganda President Yoweri Museveni[27] Yes Yes Yes
 Zimbabwe President Emmerson Mnangagwa Yes Yes No

Ratification[edit]

After the Kigali summit, more signatures were added to the AfCFTA. At the African Union summit in Nouakchott on 1 July 2018, five more nations joined the agreement, including South Africa. Kenya and Ghana were the first nations to ratify the agreement, depositing their ratifications on 10 May 2018. Of the signatories, 22 needed to ratify the agreement for it to come into effect, and this occurred on 29 April 2019 when both Sierra Leone and the Saharawi Arab Democratic Republic ratified the agreement. As a result, the agreement came into force 30 days later on 30 May 2019; at this point, only Benin, Nigeria, and Eritrea had not signed. Eritrea was not part of the initial agreement due to an ongoing state of war, but the 2018 peace agreement between Ethiopia and Eritrea ended the conflict and ended the barrier to Eritrean participation in the free trade agreement.[8][23][28][29][30] The unrecognized state of Somaliland was not a party to the discussions related to the creation of the agreement.

The 12th Extraordinary Session of the African Union on AfCFTA was called to launch the new agreement, which was hosted in Niamey on 7 July 2019. At this summit, Benin and Nigeria signed the agreement, leaving Eritrea as the only African state not a part of this agreement; Eritrea has since asked to join the agreement. Gabon and Equatorial Guinea also deposited their ratifications at this summit. At the date of the launch, there were 27 states who had ratified the agreement.[8][28][30][31][32]

Partner states[edit]

As of July 2019, 54 of the 55 African Union states had signed the agreement, with Eritrea the only country not signing the agreement. Of these member states 27 have deposited their instrument of ratification.[33][34] The 27 countries that have deposited their instruments of AfCFTA ratification with the AUC Chairperson are Ghana, Kenya, Rwanda, Niger, Chad, Congo Republic, Djibouti, Guinea, Eswatini, Mali, Mauritania, Namibia, South Africa, Uganda, Ivory Coast (Côte d’Ivoire), Senegal, Togo, Egypt, Ethiopia, The Gambia, Sierra Leone, Saharawi Republic, Zimbabwe, Burkina Faso, São Tomé and Príncipe, Gabon, and Equatorial Guinea.[34]

Ratification Status of African Nations[33]
Country Signed Date of Signing Ratified Date of Ratification
 Algeria Yes March 21, 2018 No
 Angola Yes March 21, 2018 No
 Benin Yes July 7, 2019 No
 Botswana Yes February 10, 2019 No
 Burkina Faso Yes March 21, 2018 Yes May 27, 2019
 Burundi Yes July 2, 2018 No
 Cameroon Yes March 21, 2018 No
 Central African Republic Yes March 21, 2018 No
 Cape Verde Yes March 21, 2018 No
 Chad Yes March 21, 2018 Yes June 29, 2018
 Ivory Coast Yes March 21, 2018 Yes November 13, 2018
 Comoros Yes March 21, 2018 No
 Republic of the Congo Yes March 21, 2018 Yes February 7, 2019
 Democratic Republic of the Congo Yes March 21, 2018 No
 Djibouti Yes March 21, 2018 Yes February 5, 2019
 Egypt Yes March 21, 2018 Yes February 27, 2019
 Equatorial Guinea Yes March 21, 2018 Yes July 7, 2019
 Eritrea No No
 Eswatini Yes March 21, 2018 Yes June 21, 2018
 Ethiopia Yes March 21, 2018 Yes March 23, 2019
 Gabon Yes March 21, 2018 Yes July 7, 2019
 Gambia Yes March 21, 2018 Yes April 11, 2019
 Ghana Yes March 21, 2018 Yes May 7, 2018
 Guinea Yes March 21, 2018 Yes July 31, 2018
 Guinea-Bissau Yes February 8, 2019 No
 Kenya Yes March 21, 2018 Yes May 6, 2018
 Lesotho Yes July 2, 2018 No
 Liberia Yes March 21, 2018 No
 Libya Yes March 21, 2018 No
 Madagascar Yes March 21, 2018 No
 Malawi Yes March 21, 2018 No
 Mali Yes March 21, 2018 Yes January 11, 2019
 Mauritania Yes March 21, 2018 Yes January 31, 2019
 Mauritius Yes March 21, 2018 No
 Morocco Yes March 21, 2018 No
 Mozambique Yes March 21, 2018 No
 Namibia Yes July 2, 2018 Yes January 25, 2019
 Niger Yes March 21, 2018 Yes May 28, 2018
 Nigeria Yes July 7, 2019 No
 Rwanda Yes March 21, 2018 Yes May 25, 2018
 Sahrawi Arab Democratic Republic Yes March 21, 2018 Yes April 27, 2019
 São Tomé and Príncipe Yes March 21, 2018 Yes May 28, 2019
 Senegal Yes March 21, 2018 Yes March 12, 2019
 Seychelles Yes March 21, 2018 No
 Sierra Leone Yes July 2, 2018 Yes November 7, 2018
 Somalia Yes March 21, 2018 No
 South Africa Yes July 2, 2018 Yes January 31, 2019
 South Sudan Yes March 21, 2018 No
 Sudan Yes March 21, 2018 No
 Tanzania Yes March 21, 2018 No
 Togo Yes March 21, 2018 Yes January 9, 2019
 Tunisia Yes March 21, 2018 No
 Uganda Yes March 21, 2018 Yes November 20, 2018
 Zambia Yes February 10, 2019 No
 Zimbabwe Yes March 21, 2018 Yes April 25, 2019

Implementation[edit]

The AfCFTA is set to be implemented in phases, and some of the future phases still under negotiation.[25]

At the Kigali summit, areas of agreement were found on trade protocols, dispute settlement procedures, customs cooperation, trade facilitation, and rules of origin. This was part of Phase I of the agreement, which covers goods and services liberalization. There was also agreement to reduce tariffs on 90% of all goods. Each nation is permitted to exclude 3% of goods from this agreement.[19]

At its launch on July 7, 2019, five operational instruments that will govern the AfCFTA were activated: "the rules of origin; the online negotiating forum; the monitoring and elimination of non-tariff barriers; a digital payment system; and the African Trade Observatory."[35]

Some Phase One issues that remain to be negotiated include the schedule of tariff concessions and other specific commitments. Negotiations are also underway to see which city will host the AfCFTA.[19][25]

Negotiations for Phase II began in February 2019. These negotiations will cover protocols for competition, intellectual property, and investment. Negotiations on Phase II issues are expected to finish in 2020.[19][25]

Nigerian opposition[edit]

Nigeria was one of the last nations to sign the agreement. At 200 million people, Nigeria is Africa's most populous country and has about the population of the second and third most-populous countries, Ethiopia and Egypt, combined, each of which have a population around 98 million. With a nominal GDP of US$376 billion, or around 17% of Africa's GDP, it is just ahead of South Africa, which accounts for 16% of Africa's economy. Because Nigeria is such a significant country in terms of its population and its economy, its absence at the initial signing of the agreement was particularly conspicuous. South African President Cyril Ramaphosa underscored this in comments on 12 July 2018, saying "The continent is waiting for Nigeria and South Africa. By trading among ourselves, we are able to retain more resources in the continent." South Africa later signed the agreement.[36]

44 countries initially signed the agreement on March 21, 2018. Nigeria was one of 11 African Union nations to avoid initially signing. At the time, Nigerian President Muhammadu Buhari said that Nigeria couldn't do anything that would undermine local manufacturers and entrepreneurs.[37] The Manufacturers Association of Nigeria, which represents 3,000 Nigerian manufacturers, praised the decision to back out of the agreement.[37] The Nigerian foreign minister tweeted that more domestic consultation was needed before Nigeria could sign the agreement.[38] Former president Olusegun Obasanjo said Nigeria's delay was regrettable.[39] The Nigeria Labour Congress called the agreement a "renewed, extremely dangerous and radioactive neo-liberal policy initiative", suggesting increased economic pressure would pressure workers into migration under difficult and unsafe conditions.[40]

On 21 July 2018, five more nations signed the agreement, including South Africa. At that time, the Nigerian government emphasized its non-participation was a delay, not a withdrawal, and promised to soon sign the agreement.[41] As the foreign minister had earlier emphasized, the Nigerian government intended to consult further with local businesses in order to ensure private sector buy-in to the agreement.[42]

As the Nigerian government continued to consult with local business groups in the latter half of 2018, a key concern was whether the agreement adequately prevented anti-competitive practices such as dumping.[43] As 2018 drew to a close, former President Olusegun Obasanjo said the delay was "regrettable", emphasizing the lack of trade in goods amongst African countries, the difficulties in travelling from one African country to another, and the colonial legacy which these restrictions on Africa's growth represented.[44] The government steering committee in charge of the consultative process was due to release its report on the agreement in January 2019.[45]

Nigeria's president announced on 2 July 2019 that Nigeria would sign the AfCFTA in Niger the following week. Nigeria signed the AfCFTA on 7 July 2019.[46]

Notes[edit]

References[edit]

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