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.
