Five years after its official launch, the African Continental Free Trade Area (AfCFTA) agreement continues to struggle to become fully operational.

Since its commencement in January 2021, progress has been slow due to poor implementation, persistent non-tariff barriers, weak infrastructure, and a lack of firm political will among countries to harmonize national trade policies.

On a positive note, the number of AfCFTA member states has grown to 49.

In 2022, participating countries launched the Pan-African Payment and Settlement System, enabling cross-border transactions in local currencies—a key step for boosting intra-African trade. Countries have also submitted tariff schedules, exemptions, and services commitments, laying the groundwork for trade in goods and services.

The Deciding Factor: However, experts state that infrastructure remains a critical constraint for the AfCFTA. „While 49 countries have ratified the AfCFTA and the agreement is gaining political support, infrastructure will determine its success or failure. Without infrastructure, there is no AfCFTA. That is how important infrastructure is.“

He likened trade and infrastructure to „conjoined twins,“ pointing out that both hard infrastructure like roads, ports, and power, and soft infrastructure like regulations and systems, are crucial.

Africa’s transport and logistics gaps remain severe. Poor road, rail, and port connectivity, high transport costs (sometimes accounting for 30% to 40% of the value of perishable exports), and reliance on foreign shipping lines continue to constrain intra-African trade. „We need to address the infrastructure gap. According to the African Development Bank, Africa faces an annual infrastructure financing gap of $70 to $110 billion.“ „We must bridge the gaps in power, roads, and services because goods need reliable systems to be transported and traded on the roads.“ The AfCFTA cannot succeed without what he termed the „six pillars“: people, goods, services, capital, innovation, and culture. „If we cannot get these six pillars working, we cannot have a single market,“ he said, adding that examples from ECOWAS and the East African Community show that full participation from all 55 member states is not a prerequisite for progress.

Rules of origin remain a major bottleneck. While agreement has been reached on 92% of goods, negotiations for sensitive sectors like automobiles and textiles have stalled. „Most rules of origin have been agreed upon, but the pending rules for the automotive and textile sectors are holding back full implementation.“

The AfCFTA’s goal of eliminating tariffs on 90% of goods is not expected to be realized until 2034.

Governments remain cautious, and businesses face uncertainty. The „Guided Trade Initiative,“ launched in 2022, aims to test the AfCFTA framework and facilitate commercially meaningful trade. Initial products included tea, coffee, ceramic tiles, batteries, processed meat, sugar, pasta, and sisal fiber. Eight countries initially participated: Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia.

More than 39 countries are now trading under the initiative, but hesitancy persists. Some governments fear revenue losses or losing out to competition from larger economies like Nigeria and South Africa.

What issues remain unresolved under the AfCFTA framework? The AU Assembly adopted Phase II protocols in 2023 and 2024 covering investment, intellectual property, competition policy, digital trade, and women and youth in trade; these protocols now require ratification.

Countries do not need to wait for ratification to align their domestic laws and institutions with the investment protocol’s requirements.

The protocols clarify member states‘ rights and obligations, allowing time for preparatory reforms.

While the framework allows for the gradual elimination of tariff barriers on up to 97% of tariff lines, addressing non-tariff barriers remains critical.

For small and medium-sized enterprises, major obstacles include limited trade information, unclear import/export procedures, high costs, and difficulty meeting regulatory standards like health and safety certifications.

African Continental Free Trade Area (AfCFTA)

The African Continental Free Trade Area (AfCFTA) is a landmark trade agreement launched in 2021 to create a single market for goods and services across 54 of the 55 African Union nations. Established by the 2018 AfCFTA Agreement, its history is rooted in decades of pan-African economic integration efforts, aiming to boost intra-African trade, industrial development, and economic self-reliance. It is the world’s largest free trade area by number of participating countries.

Pan-African Payment and Settlement System

The Pan-African Payment and Settlement System (PAPSS) is a financial market infrastructure launched in 2022 by the African Export-Import Bank (Afreximbank) in collaboration with the African Continental Free Trade Area (AfCFTA). It was created to enable instant, cross-border payments in local African currencies, reducing reliance on external hard currencies like the US dollar or euro. Its history is directly tied to the goal of boosting intra-African trade and economic integration under the AfCFTA agreement.

African Development Bank

The African Development Bank (AfDB) is a regional multilateral development finance institution established in 1964 to promote sustainable economic development and social progress across its African member countries. Headquartered in Abidjan, Côte d’Ivoire, it provides financing, policy advice, and technical assistance for projects aimed at reducing poverty and improving living conditions on the continent.

ECOWAS

ECOWAS, or the Economic Community of West African States, is a regional political and economic union established in 1975 to promote cooperation and integration across 15 member states in West Africa. Its history is marked by efforts to foster economic development and, notably, by its active role in conflict resolution and peacekeeping missions within the region, such as those in Liberia and Sierra Leone. Today, it remains a key institution working towards a single currency, free movement of people, and greater regional stability.

East African Community

The East African Community (EAC) is an intergovernmental organization of seven partner states in East Africa, originally founded in 1967 but which collapsed a decade later. It was successfully revived in 2000 with the aim of fostering economic, political, social, and cultural integration, building on a long history of shared language, infrastructure, and trade among its member nations.

Guided Trade Initiative

The Guided Trade Initiative is a modern economic program, not a historical place or cultural site. It is a mechanism launched in 2022 by the African Continental Free Trade Area (AfCFTA) to accelerate trade by allowing selected countries and products to trade with preferential tariffs ahead of the full agreement’s finalization. Its history is therefore very recent, marking a practical step in implementing the broader goal of pan-African economic integration.

AU Assembly

The African Union (AU) Assembly is the supreme decision-making body of the African Union, consisting of the heads of state or government of its member countries. It was officially launched in 2002 in Durban, South Africa, succeeding the Organisation of African Unity (OAU), which was founded in 1963 to promote decolonization and unity. The Assembly sets the AU’s political agenda, makes key policy decisions, and elects its leadership, convening at least once a year at the AU Headquarters in Addis Ababa, Ethiopia.

Phase II protocols

„Phase II protocols“ is not a specific place or cultural site, but a general term for the second stage of clinical trials in medical research, which tests the efficacy and side effects of a new treatment. Therefore, it has no physical location or cultural history in the traditional sense. Its conceptual history is tied to the development of modern clinical research ethics and regulations in the 20th century.