The African Continental Free Trade Area (AfCFTA) is a comprehensive free trade agreement and a flagship project of the African Union's Agenda 2063, aiming to create a single continental market for goods and services across all 55 African Union member states. The decision to establish the AfCFTA was adopted in January 2012 in Addis Ababa, Ethiopia, to accelerate intra-African trade and resolve the fragmentation caused by multiple Regional Economic Communities (RECs). The Agreement was signed on March 21, 2018, in Kigali, Rwanda, and entered into force on May 30, 2019. Trading officially commenced on January 1, 2021.
The AfCFTA's core mechanism is the progressive elimination of 90% of tariffs on goods over a period of 5 to 10 years. Its implementation is governed by protocols, with Phase I covering the Protocol on Trade in Goods, the Protocol on Trade in Services, and the Protocol on Rules & Procedure on the settlement of disputes. Key operational instruments include the Rules of Origin, the Continental Online Tool for monitoring and elimination of Non-tariff Barriers (NTBs), and the Pan-African Payments and Settlement System (PAPSS), which facilitates payments in local currencies. The AfCFTA is closely connected to the African Union (AU) and its vision for economic integration, tracing its origins to the 1991 Abuja Treaty.
The agreement has recently expanded its scope through new protocols. Phase II negotiations cover Investment, Intellectual Property Rights, and Competition Policy, while the Protocol on Digital Trade was added due to its importance. The Investment Protocol, adopted in February 2023, mandates the termination of approximately 173 intra-African Bilateral Investment Treaties (BITs) within five years of its entry into force to harmonize investment policies. The Guided Trade Initiative (GTI) was launched in 2022 to kickstart commercially meaningful trade among eligible State Parties.