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.
