As we reported on March 30, 2018, 44 African governments signed onto the legally-binding Africa Continental Free Trade Area (AfCFTA) during an extraordinary AU summit this past March. The AfCFTA is intended to lead to greater economic integration between African countries and drive continental economic growth.
On May 23, 2018, the US Foreign Agricultural Service in Addis Ababa reported that in May, Kenya and Ghana ratified the AfCFTA, while other countries, like Rwanda, Niger, and Ethiopia, have indicated they will ratify soon. The report said, in part:
At the ceremony to mark Kenya and Ghana’s joint deposit of ratification instruments, the AU Commission (AUC) Chairperson expressed his hope that 20 other AfCFTA signatories will ratify before the end of the year. At least 22 countries must ratify before the agreement can go into effect. Following ratification, individual countries must make domestic legislation and policy changes to begin implementing their AfCFTA commitments. At this stage, AfCFTA negotiators are continuing their work on various implementing details, including rules of origin, sanitary and phytosanitary requirements, and technical barriers to trade. With respect to tariff schedules, the framework agreement aims to progressively liberalize 90 percent of individual countries’ tariff lines. Participating countries are expected to submit their individual tariff schedules by January 2019. Phase II negotiations, scheduled for 2019, will cover intellectual property rights, investment policy, and competition policy.
Considering the remaining work to finalize the remaining parts of the agreement, the unpredictable nature of country’s legislative processes to ratify the AfCFTA, and existing trade capacity constraints, full implementation appears to be at least a few years down the road. The degree of implementation will squarely depend on the capacity and commitment of individual African countries, with the AUC playing a supporting role.
The progress made thus far on the AfCFTA is a major step towards greater continental economic integration, which will contribute to, among other things, the Malabo Declaration goal of tripling of intra-Africa agriculture trade by 2025. This enhanced African interconnectedness is expected to not only create more opportunities for African businesses, but also open doors for increased U.S. trade and investment in the future.