Five years after its official launch, the African Continental Free Trade Area (AfCFTA) still struggles to function fully.

Since its operational start 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 nations 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 to boost 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 say infrastructure remains a critical constraint for the African Continental Free Trade Area (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.”

Trade and infrastructure were likened to “conjoined twins,” noting 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 export value of perishable goods), 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 move and be traded on the roads.” The African Continental Free Trade Area (AfCFTA) cannot succeed without what was 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,” it was stated, 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. Although agreement has been reached on 92% of goods, negotiations for sensitive sectors like automobiles and textiles have not progressed. “Most rules of origin are agreed, but 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 hesitation 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, key 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 African nations. Established by the African Union, its history stems from decades of pan-African economic integration efforts, notably the 1991 Abuja Treaty, which envisioned an African Economic Community. By reducing tariffs and harmonizing trade rules, it aims to boost intra-African trade, industrial development, and economic self-reliance.

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 Union. It was created to facilitate instant cross-border payments in local African currencies, reducing reliance on external hard currencies like the US dollar or euro. Its history is rooted in the goals of the African Continental Free Trade Area (AfCFTA) to boost intra-African trade and economic integration by simplifying and securing financial transactions across the continent.

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 financial and technical assistance for projects ranging from infrastructure and energy to health and education, aiming to reduce poverty and improve living standards on the continent.

ECOWAS

ECOWAS, or the Economic Community of West African States, is a regional political and economic union established by the Treaty of Lagos in 1975. Its primary goals are to promote economic integration, cooperation, and stability across its 15 member states in West Africa. Historically, it has also played a significant role in peacekeeping and mediating conflicts in the region through its security protocols and military interventions.

East African Community

The East African Community (EAC) is an intergovernmental organization of seven partner states in East Africa, founded to foster economic, political, social, and cultural integration. Its modern iteration was re-established in 2000, building upon an earlier, dissolved community from 1967 to 1977. Today, it operates a customs union and a common market, aiming to achieve a monetary union and ultimately a political federation among its members.

Guided Trade Initiative

The Guided Trade Initiative is a modern economic program launched by the African Continental Free Trade Area (AfCFTA) in 2022. It is a pilot project designed to allow a select group of countries and businesses to trade specific goods tariff-free, serving as a practical test to resolve logistical and administrative challenges before the full implementation of the continent-wide free trade agreement.

AU Assembly

The AU Assembly, formally the Assembly of the African Union, is the union’s supreme decision-making body, composed of heads of state and government from all member states. It was established in 2002 in Durban, South Africa, succeeding the Organisation of African Unity (OAU) founded in 1963, with a renewed focus on promoting unity, peace, and socio-economic development across the continent. Its annual summits set continental policies, appoint key officials, and address critical issues of peace, security, and integration.

Phase II protocols

“Phase II protocols” is not a specific place or cultural site. The term typically refers to a stage in clinical trials for testing new drugs or medical treatments, where their effectiveness and side effects are evaluated on a larger group of people. Therefore, it does not have a geographical location or a cultural history in the traditional sense.