1 Background1
create a single market for goods, services, facilitated by movement of persons in order to deepen the economic integration of the African continent and in accordance with the Pan African Vision of ‘An integrated, prosperous and peaceful Africa’ enshrined in Agenda 2063. (African Union 2022a)
This implies connecting 1.3 billion people across 55 countries with a combined GDP valued at $3.4 trillion, with an estimated impact of lifting 30 million people out of extreme poverty by 2035 (World Bank 2020).
Having gathered broad political momentum since its opening for signature in 2018, the AfCFTA is seen as a way to shift the African economic development model away from raw material exports towards greater investment and economic diversification, thus helping address the economic effects of Covid-19 (see, for instance, Macleod and Luke 2022). Indeed, the African Union (AU) Executive Council policy decisions of October 2021 refer to the AfCFTA only in terms of its role in Covid-19 economic recovery (AU Council 2021a, §58). By providing a basis to develop regional value chains that go beyond existing regional free trade areas (FTA s), the hope is that the AfCFTA can increase intra-African trade from a current average of 18 per cent of overall trade – even if this figure underestimates current trade by ignoring informal trade and is
Postponed since July 2020 due to the effects of Covid-19, trade under the AfCFTA was officially launched on 1 January 2021 (see Yearbook on the African Union 2020, 178). It now counts 54 signatory countries, and as of 31 December 2021, 38 countries had deposited their instruments of ratification with the AU (tralac 2022). The AfCFTA secretary-general, Wamkele Keabetswe Mene, sworn into office on 19 March 2020, has been omnipresent in African and international discussion fora, articulating the logic, potential benefits, and status of the AfCFTA while building up a secretariat in Accra, Ghana, to oversee negotiations and implementation of the agreement.
Though trade reportedly took place under the new agreement in early 2021 – two shipments of alcoholic products and cosmetic goods from Ghana to South Africa2 – this was only symbolic. By the end of 2021, negotiations on tariff offers, rules of origin (RoOs) and schedules of commitments are still ongoing among state parties, with numerous steps still to be taken by national governments before trade can meaningfully take place under the agreement. As Luke and Macleod (2021) put it, ‘the AfCFTA is stuck somewhere between its “negotiation” and “implementation” phases. At several points, AU summits have celebrated the near-completion of the AfCFTA, yet effective implementation has been elusive’.
As would be expected for such a large and ambitious agreement, the institutional set-up for governing the AfCFTA is also a work in progress. A range of ongoing, multi-level, complex interactions of public and private actors, as well as formal and informal processes, will shape the final form of the AfCFTA commitments and how they are how implemented. In this phase, beyond national negotiating teams, the array of AfCFTA actors includes the newly established AfCFTA Secretariat, the AU Commission (AUC) portfolio department for Economic Development, Trade, Industry and Mining (ETIM), as well as the REC s and other sub-regional customs unions.3 Presented as ‘more than a trade agreement’ in terms of political ambitions for the continent, the array of stakeholders goes beyond those directly involved in trade issues to include infrastructures, standards, and industrialisation, with competing institutional interests between new and existing continental initiatives and regional organisations, depending on how broadly the AfCFTA and regional mandates are interpreted.
The remainder of this chapter is structured as follows: section 2 briefly touches on decision-making and implementation structures, with the main body of the discussion on decisions, contested issues, and implementation challenges coming in section 3 on key developments in 2021. Section 4 provides a brief outlook.
2 Decision-Making and Implementation Structures
Two broad dimensions of the AfCFTA decision-making structures merit attention. First is the creation and build-up of the AfCFTA Secretariat, a new autonomous body operating within the AU structures. Second is the mandates of key bodies and the division of labour with other key actors involved in continental trade, most notably the AUC, the REC s, and other regional organisations with pre-existing trade agreements. The interest in these mandates is partly about seeking clarity, but also ensuring the necessary participation, collaboration, and coordination, as well as credibility and predictability.
2.1 AfCFTA Secretariat Establishment
Following the decision made at the 13th Extraordinary Session of the AU Assembly (Johannesburg, South Africa, 5 December 2020), coordination of the AfCFTA negotiations was transferred from the AUC to the AfCFTA Secretariat (AU Assembly 2020a). The secretariat has begun building up its staff capacity, to be continued over two phases spread over four years and subject to budget availability. The annual estimated full staff costs were estimated to be $29.39 million, covering offices for the secretary-general the deputy, and seven directorates. The approved 2022 budget was $13.7 million, reflecting the phased recruitment approach, with 56 per cent of this to be sought through partner funding programmes (ibid.). Overall, the AfCFTA seeks to fill 296 posts (AU Council 2021a, §3[f]).5
The AfCFTA Secretariat is a ‘functionally autonomous’ institutional body within the AU system, with an independent legal personality. This implies the right to make administrative and operational decisions, including on recruitment, without requiring AUC approval, much as with other AU institutions and organs such as New Partnership for Africa’s Development (NEPAD) and the Pan-African Parliament (Sodipo 2019).
As defined in the AfCFTA Agreement, the AU Assembly is to provide oversight of and strategic guidance to the secretariat, and the Council of Ministers (of Trade) is responsible for implementation and enforcement of the agreement, considering reports and overseeing the secretariat. It will also direct the Committee of Senior Trade Officials, which in turn can direct the secretariat to undertake specific assignments (African Union 2018). The overall institutional structures are presented in Figure 10.1.
Institutional framework for implementing the AfCFTA
SOURCE: AFCFTA SECRETARIAT AND UNDP (2020, 25)
Because of its autonomy from the AUC, the AfCFTA secretary-general is accountable to African Heads of State and Government rather than the AUC hierarchy. The decision on whether the AUC should serve as secretariat for the AfCFTA rather than a establishing a new body was reportedly subject to ‘intensive debate’, with the final decision meaning that the secretariat is ‘divorced from the political processes of the AUC’ and does not have ‘to wait for approvals’ (Sodipo 2019, 5). In hierarchical and thus reporting terms, the secretary-general is ‘above’ the AUC trade commissioner. Further, although the AfCFTA Agreement does not mention the AUC, it is implicitly a part of defining the division of labour with the REC s and other regional bodies.
2.2 Division of Labour with Regional ‘Building Blocks’
The AfCFTA is an agreement among signatory states, who therefore also negotiate its content. While members of customs unions must make the same tariff offers in order to maintain their union, membership of other regional FTA s
The preamble of the AfCFTA Agreement recognises ‘the REC s FTA s as building blocs towards the establishment of the African Continental Free Trade Area’ (African Union 2018, 2). This is repeated in Article 5 on the principles of the agreement, with the Protocol on Trade in Goods also stating that members of the REC s ‘which have attained among themselves higher levels of elimination of customs duties and trade barriers than those provided for in this Protocol, shall maintain, and where possible improve upon, those higher levels of trade liberalisation among themselves’ (African Union 2018, §8[2]).
Together, these imply that the AfCFTA is an agreement for establishing an FTA among states that will govern trade between the eight AU-recognised REC s with existing FTA s or customs unions. They also imply that where there is an FTA or customs union, trade within the REC s will continue to be governed regionally. Despite this, their role is defined as observers: ‘The REC s shall be represented in the Committee of Senior Trade Officials, in an advisory capacity’ (African Union 2018, §12).
Secondly, the Southern African Customs Union (SACU) and the Economic and Monetary Community of Central Africa (CEMAC) operate as customs unions within their respective REC s. Given their common external tariff, customs union member states must therefore coordinate their negotiating position, implying that they should participate in negotiations and play a role beyond an advisory capacity, even though they are not AU-recognised REC s. In addition, prior to the AfCFTA, the Southern African Development Community (SADC), the Common Market for East and Southern Africa (COMESA), and the EAC had established the Tripartite FTA to govern trade among themselves, requiring four more ratifications to enter into force and begin trading.7 If these relationships are not clarified and well managed, the United Nations Economic Commission for Africa (UNECA) (2021a, 95) suggests that instead of being ‘building blocks’, existing REC FTA s may become ‘stumbling blocks’ in the implementation of the AfCFTA. In recognition of this, reflecting a pragmatic approach that goes beyond the letter of the agreement, SACU and the West African Economic and Monetary Union (UEMOA) have now been invited to participate in meetings where the REC s are present, though the need also for CEMAC to be invited was raised in 2021.
The AfCFTA Secretariat met with the heads of the REC s on 20 September 2021 to discuss options for coordinating between secretariat and the secretariats and/or commissions of the REC s, as well as develop mechanisms for effective collaboration between the AfCFTA Secretariat and the secretariats/commissions of the REC s.8 At the same time, as part of the AU reform process, 2019 saw the first Mid-Year Coordination Meeting (MYCM) between the AU and the REC s, repeated in 2020 and 2021, themselves part of an ongoing exercise to formally define the division of labour between the AU, the REC s, and member states. However, the AU Assembly in early 2021 decided that ‘the
3 Key Developments in 2021
As the above discussion highlights, despite considerable progress and political momentum, the practicalities of the AfCFTA are still at a preliminary stage (see Yearbook on the African Union 2000, 182–186). This section provides a brief analysis of developments during 2021 with respect to key aspects of the implementation of the AfCFTA. As it shows, progress has continued across a wider range of issues, despite the disruptions brought about by Covid-19, which hindered travel to summits and, perhaps more importantly, physical presence at trade negotiations. Nonetheless, the issues raised above around the division of labour between continental and regional actors remain important for all that follows.
3.1 AfCFTA Ratifications
Just before its launch in January 2021, AfCFTA ratifications stood at 34.9 By the end of 2021, these had risen to 38, suggesting a slow but continuing political momentum behind the agreement (tralac 2022). The latest additions include
At recurring summits since its launch in 2019, African Heads of State and Government have been urged to accelerate the ratification process, putting pressure on the remaining states to do so. Though only 16 countries, their reticence to ratify is important. In particular, Botswana – reportedly reluctant to ratify until all aspects of the agreement have been established – is also member of SACU, hindering its ability to implement the AfCFTA until all members ratify. The same goes for the ECOWAS countries, where Benin and Liberia reportedly continue to analyse the implications of ratification.10 Similarly, Mozambique is reportedly concerned about the trade-off between capacity to implement and actual benefits, given the predominance of SADC in its intra-African trade and having left COMESA in 1997 for the same reason.
As efforts continue to encourage ratification by remaining states, actual trade can only take place once this has been translated into domestic law and published for public and private sector users. Though this is straightforward in theory, as documented by UNECA (2021, 30), the differences in legal system of anglophone African (common law) countries and francophone African (civil law) countries can also complicate the domestication process. In francophone member states of, say, ECOWAS or SADC, regional laws and regulations can be appealed in the courts of member states, whereas this is not the case in anglophone states, where international laws must be promulgated at the national level to have the force of law.
3.2 AfCFTA Negotiation Status: Tariff Offers and RoOs
By the end of 2020, 41 countries or customs unions had submitted their tariff offers to other state parties (Mene 2020). By November 2021, this had risen to 43 offers, 29 of which complied with the need to cover 90 per cent of tariff lines. This has since risen to 33 offers, as reflected in the recently launched AfCFTA database (including customs union members that have not ratified
At least part of the blame for the shift in dynamic lies with RoO negotiations. Despite the expectation that these would be finalised by June 2021 (Mene 2020), this did not happen. Although RoOs had been agreed for 87.7 per cent of tariff lines, as of April 2022 (AU Assembly 2022, §86), some 81 per cent of these had already been agreed upon by December 2020 (AU Assembly 2020b, §11).
The remaining tariff lines are particularly contentious, relating as they do to automobiles, textiles, sugar, and fisheries.13 For these outstanding sectors, Gourdon et al. (2021) find that these sectors have, on average, more restrictive product-specific rules in existing FTA s, as well as that their preferential margins are considerably higher than those sectors where rules have been agreed, underlining why their negotiations are stalling. While some countries argue for stringent RoOs to avoid benefits contributing to those outside the AfCFTA FTA, ‘others – generally the least developed countries with weaker productive capacities – advocate more flexible, pro-developmental rules that allow them to source input from the cheapest and most competitive locations’ (Fofack and Mold 2021, 5). As they discuss, more stringent RoOs risk stimulating negligible changes, with press reports reflecting concerns in Nigeria and South Africa about over-lenient RoOs that would make Nigeria a ‘dumping ground’.14 At the same time, some argue that more stringent RoOs are necessary in order to encourage the investment required to promote industrialisation and regional value chains (Ismael 2021), key objectives of the AfCFTA.
Other delays to negotiations have come from the need to agree reciprocally on issues, such as the treatment of customs unions. The position of Nigeria to argue for the whole ECOWAS region to be allowed a ten-year tariff phase-down period for its main tariff reductions, normally meant only for least developed
Although negotiations are still ongoing, the period over which to reduce tariffs is passing and fears of a loss of momentum are rising. A ministerial directive in October 2021 has stipulated that preferential trade may begin based on the 28 technically verified offers that meet the minimum threshold of 90 per cent of tariff lines and RoOs agreed (ibid., §10) with the AfCFTA Secretariat now due to publish the AfCFTA Tariff Book, allowing state parties to translate this legislation into national law for implementation (ibid., §13). Rather than a ‘single undertaking’ approach common with FTA s, this approach risks creating a partial FTA by lowering the pressure to conclude negotiations on remaining sectors.
3.3 Trade in Services and Beyond
In addition to negotiations to liberalise trade in goods being incomplete, those on trade in services have also been delayed. Following the signing of the AfCFTA Agreement on 31 March 2018, the 31st Ordinary Session of the AU Assembly (Nouakchott, Mauritania, 1–2 July 2018) agreed to focus service trade negotiations on five priority sectors: business services, communications, finance, tourism, and transport.15 By the end of 2020, 34 signatories had submitted initial offers, a figure that had risen to 46 by April 2022.16
The deadline for completing negotiations has repeatedly been pushed back. It is not clear if that deadline will be met. According to some, given the form of negotiation ‘it is not guaranteed that actual services sector liberalisation will be achieved’ (tralac 2020). Countries reportedly only make commitments that bind existing practices when negotiating under the ‘positive listing’ approach that is being applied. At the same time, services trade liberalisation is seen as critical to maximising the benefits from increased trade in goods, as evidenced by UNECA’s focus on trade in services in their 2021 Assessing Regional Integration in Africa (ARIA) report that cites their role as embedded components in
The interconnection of trade in both services and goods are perhaps best highlighted in the AfCFTA ambition to promote industrialisation, particularly through the creation of regional value chains (RVC s). This is cited as an ambition in the initial AfCFTA Agreement and has led to efforts to identify and create conditions for greater cross-continental cooperation. In this context, the AU Specialised Technical Committee of Ministers of Trade, Industry and Minerals (STC–TIM) requested that the AUC, the REC s, and other partners carry out a mapping of existing RVC s by way of seeing the potential for building on these (African Union 2021). This is seen by some as the key goal of the AfCFTA – with ‘the increasingly favourable environment for foreign investment and lower trade barriers associated with the AfCFTA’ seen as key to RVC development (Fofack and Mold 2021, 3) – while a flurry of other reports by international organisations examine the different stages and potential input and trade opportunities in value chain development, often focused on the automobiles sector, textiles, and other key sectors, notably also those that are most sensitive in current RoO negotiations (as discussed above).
3.4 Phase II Negotiations
The above negotiations on trade in goods and services represent phase I of AfCFTA negotiations. The year 2021 saw the establishment of the committees to facilitate negotiations on phase II topics, namely investment, competition policy, intellectual property rights, e-commerce, and women and youth in trade. Some but not all of these were able to begin discussions (see AU Assembly 2022a). For example, the Committee on Investment was established and was able to develop and adopt their terms of reference, together with the Negotiating Modalities and Guiding Principles for negotiating the Protocol on Investment (ibid.).
The issues included in phase II cover a vast array of issues covered by national legislation, often yet to be covered or harmonised by existing regional bodies, partly due to the difficulties in doing so, for example implementing an investment protocol, or because these are relatively new topics, such as e-commerce. One recent study on digital trade policy looks at four countries as they prepare for phase II negotiations and concludes that, having considered their national policies and domestic regulations and where harmonisation would be needed, they must decide ‘whether AfCFTA is the right platform for achieving this efficiently’ (Tavengerwei et al. 2022, 4). Further, as Sodipo (2021, 12) highlights, the mandate for phase II issues was given to the African Union member states rather than AfCFTA state parties, implying that they will
Phase II negotiations were initially scheduled to be concluded by December 2020 and phase III negotiations to commence immediately after their conclusion (AU Assembly 2020c, §22). Given Covid-19 disruptions, and perhaps the extended time being taken for phase I negotiations, a new deadline of 31 December 2021 was set for the conclusion of phase II and III negotiations (AU Assembly 2020d, §15) – though this was also surpassed, leading to a new request by the AU Assembly to ‘fast track the conclusion of all Protocols on Phase II issues by September 2022’ (AU Assembly 2022a, §38).
3.5 Adjustment Fund and Payment System
A key partner to the AfCFTA Secretariat has been the Cairo-based African Export-Import Bank (Afreximbank). They are together credited with establishing a $1-billion facility to support the automotive sector in Africa (AU Assembly 2022a, §44), thus supporting the potential for RVC creation in that sector and reportedly helping unblock RoO negotiations. Afreximbank is also behind establishment of the AfCFTA Adjustment Facility, a fund to offset the disruptions governments and the private sector are suffering as a result of AfCFTA implementation. The facility shall be part of the AfCFTA Secretariat, and the Afreximbank serves as its fund manager, with secretariat staff to be financed from the interest earned from the investments managed by the fund manager (ibid., §§41–42).
The criteria for access to the fund remain to be clarified, though it will reportedly be made up of a ‘Base Fund’, with contributions from state parties, grants, and technical assistance funds ‘to address tariff revenue losses as tariffs are progressively eliminated’ and other provisions implemented; a general fund to mobilise concessional funding; and a credit fund to mobilise commercial funding to support both the public and private sectors in their adjustments to AfCFTA implementation effects.17 The adjustment fund is regarded as requiring some $10 billion over the next five to ten years, and it has reportedly committed $1 billion in order to launch the facility.
3.6 External Relations
The high profile relationship between the AfCFTA Secretariat and Afreximbank stand in contrast to that with external development partners. Although a range of partners are acknowledged by the AU as supporting the AfCFTA process – namely the European Union (EU), Germany’s Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Denmark, Canada, the USA, Australia, the UK, France, the Commonwealth Secretariat, the Organisation International de la Francophonie (OIF), the UN Development Program (UNDP), the World Bank Group, and the Islamic International Trade Finance Cooperation (AU Assembly 2020b) – these partnerships have been kept low profile. Anecdotally, there is a perceived attempt by the AfCFTA Secretariat to distance itself from international partners. This would perhaps be an astute approach, given the risk of criticism of being unduly swayed by external interests, and is in line with the frequent reference to the AfCFTA as an agreement to redress Africa’s economic model, which remains too closely connected to that of the colonial period.18 But it also poses challenges given the interest in accessing external financial assistance to support more than half of the AfCFTA Secretariat budget (AU Assembly 2021b) or indeed supporting the adjustment fund, and for partners seeking clarification of who to support and how, between the AUC, the AfCFTA Secretariat, the REC s, and other relevant partners.
Beyond financial support, the AfCFTA also raises issues related to external trade relations. One aspiration cited by both African and European policy-makers, for example, is for a future continent-to-continent trade agreement (AU/EU 2021). That would require that the AfCFTA become a customs union,
Beyond that, commentators, such as Carlos Lopes, cite ‘the European Union aggressively pushing bilateral and sub-regional trade deals with African countries’ as one of ‘the main obstacles to a successful AfCFTA’.19 Despite the AfCFTA, some countries are negotiating trade agreements with third actors such as the EU, the USA, and China, a pattern blamed by some on ‘misaligned and divisive incentives cast upon African countries and regional groupings’, with ‘EU trade policy towards Africa today … a major part of the problem’ (Luke et al. 2021) given its focus on regional sub-groups (themselves not all consistent with established regional communities).20
On the one hand, this line of thinking arguably underestimates African agency and the ability of its politicians to determine matters of national interest – a point eloquently made by the then Ghanaian minister of foreign affairs and regional integration in a letter to the European Parliament in 2016 on their signing of the interim Economic Partnership Agreement (EPA) with the EU (MFARI 2016). It further continues a debate that began in the early 2000s when the EU and African countries began negotiating EPA s to align with World Trade Organisation (WTO) rules, highlighting the challenge that African policy-makers face in promoting the AfCFTA, although a large share of their trade remains with external partners. On balance, some suggest that policy-makers should ‘not let a preoccupation with a continent-to-continent FTA divert attention away from other avenues to foster constructive EU–Africa collaboration on trade’.21
3.7 The AfCFTA and the Private Sector
As Mattli alternatively puts it, successful regional integration has historically depended on the interaction of demand from business and supply from politicians who are interested and able to promote the agenda (Mattli 1999, 12–13). Although the AfCFTA is currently still being negotiated by governments, its impact will only be felt if and when it is applied and used by businesses. Work by Stuart (2021) for UNECA suggests that preference utilisation rates for existing trade agreements are rather low, with the utilisation rate of ECOWAS preferences of a basket of Nigerian exports to Ghana, for example, just below 5 per cent, lower than data for the EAC and COMESA, though there too utilisation
Beyond their input in national negotiating positions, where positions clearly vary across sectors and countries, there are increasing efforts to engage the private sector in discussions of AfCFTA implementation. Some of this has come from the private sector itself, for example the AfroChampions Initiative, established in 2018 as a public–private partnership bringing together major African business leaders to push for investment to underpin the AfCFTA. Described as ‘an official platform of exchange between the African private sector and the leaders of the African Union’,22 with a ‘trillion dollar investment framework’ that was adopted at the AU Assembly in 2020 (AU Assembly 2020c, §27), African business leaders have been visible in public events in an attempt to trigger investment to accelerate implementation of the AfCFTA and have been frequently cited in discussions of the private sector. The African Business Council (ABC), an independent private sector institution of the AU, offers another forum to promote and lobby for pan-African business interests.23 The question these forums raise relate to their representativeness, with politically connected firms being a common feature across African economies.
The AfCFTA–REC coordination meetings held by the AfCFTA Secretariat in 2021 reportedly included private sector representatives from the ABC and AfroChampions as well as regional groupings, including the East African Business Council (EABC), COMESA Business Council (CBC), the Federation of West Africa Employers Association (FOPAO), and the Federation of West African Chambers of Commerce and Industry (FEWACCI).
Although the above suggests attempts to enhance private sector participation, the participating organisations primarily represent formal (and large) businesses. One proposal tabled to be more inclusive, and perhaps increase preference utilisation under the AfCFTA, is to introduce a simplified trade regime (STR), similar to what exists at certain border posts in the COMESA region (Karkare et al. 2021). However, implementation of such an STR has not been without challenges. Beyond the problem of the need to update common lists of goods, without which traders end up paying duties on goods that should be exempt, the STR still implies conformity to other formal procedures, such as sanitary and phytosanitary (SPS) requirements, other licenses, and certificates, as well as value-added tax (VAT), excise duties, and other local taxes. Indeed, studies show that the existence of such a simplified system, even when
3.8 Women and Youth
A core part of the discussion around the STR is to protect women. Gender is a regular feature in discussions of the AfCFTA and the related negotiations, with widespread concern – among international organisations at least – to ensure that the AfCFTA Agreement can and does promote gender equality. Although the agreement itself does not make specific commitments to gender, it refers to ‘inclusive socio-economic development, gender equality and structural transformation of the State Parties’ among its main objectives (AU Assembly 2018, §3[e]), with the Protocol on Trade and Services citing the need to improve women’s export capacity (ibid., §27[2]d). This is the first time that the achievement of gender equality has been explicitly stated as an objective in an African trade agreement, though it lacks specific commitments and tools (Laperle-Forget 2021). In response, a Protocol on Women and Youth in Trade was being developed with a legal framework that guides AfCFTA state parties to support women and youth to ‘meaningfully leverage trade opportunities under the AfCFTA’ (Mene 2022). The AfCFTA was working with the UNDP and UN Women in 2021 to consult on ways to take this forward. However, Laperle-Forget (2021) finds that most AfCFTA state parties have already taken firmer commitments on gender equality and women empowerment in other regional and multiparty trade agreements. The challenge then is whether these can again serve as building blocks, or rather reflect commitments that have yet to be met. Further, contributors to the joint report by the AfCFTA Secretariat and the UNDP (2020, 19) state that ‘the expected benefits for women should be tempered with realism’, with many of the issues being faced relating to issues beyond the scope of the AfCFA, such as women’s rights, access to finance and other assets, and the gender wage gap, which may even drive competitiveness in exports.
Although women and youth are likely to be affected differently according to the impact of the agreement on specific sectors, efforts to increase their inclusion are often closely connected. A Women and Youth in Trade Committee has been established as part of the formal AfCFTA institutional architecture (AU Assembly 2022, §34), together with an Independent Continental Youth Advisory Council on the AfCFTA (ICOYACA) comprising affiliated national chapters. These represent positive steps in helping the AfCFTA engage a wider societal cross section if they can move beyond formal, bureaucratic processes to wider societal engagement.24 But as with the discussion above, these national and
Wider societal knowledge of the agreement and its implications are only now beginning to spread. Surveys conducted in 18 African countries in late 2019 and early 2020 suggest that Africans are split between ‘support for restrictive trade policies that protect local industries (47%) and a preference for open international trade (49%)’ (Appiah-Nyamekye Sanny and Patel 2021).25 Although the majority (58%) of respondents reportedly want to allow foreign-owned retail shops and access to low-cost goods, a large share (38%) want trade in consumer goods to be reserved for nationals (ibid.). While only indicative, these figures nevertheless not only reflect the challenge faced in those countries still considering AfCFTA ratification today, but also undoubtedly present the challenge when actual AfCFTA implementation is undertaken and the real effects begin to be felt.
4 Outlook
Although initial deadlines have been delayed, progress around AfCFTA negotiations and the establishment of necessary organisations and supporting measures continued in 2021 in spite of the continuing disruptions of Covid-19. Nonetheless, the emerging challenges described here, in terms of institutional relations and the AfCFTA negotiations themselves, will remain and perhaps require renewed efforts to maintain the political traction established thus far. Some have suggested that this will take concessions from some ‘regional powers’,
A need to show concrete progress has led the AfCFTA Secretariat to explore areas where aspects of the AfCFTA can be put into practice on the ground. The AU Assembly in early 2022 therefore commended the AfCFTA Secretariat ‘on the progress made on trade facilitation on the Abidjan–Lagos Corridor’ in West Africa and endorsed its adoption of a corridor approach to trade facilitation as a way to implement the AfCFTA (African Union 2022). Though trade facilitation is a core part of the AfCFTA Agreement in formal terms, and widely understood as a key aspect to ensuring trade liberalisation leads to increased trade and the benefits thereof, the Abidjan-Lagos Corridor is explicitly within ECOWAS, underpinning intra-ECOWAS trade that is therefore governed by the REC. As established above, the AfCFTA is an FTA among existing FTA s and countries. As this further illustrates, the division of labour between the AUC, the AfCFTA Secretariat, and regional organisations may yet require clarification in order for effective implementation to take place.
[AfCFTA] success hinges on the capacity of countries and governments to adopt and sustainably implement a wide range of complementary policies addressing multiple challenges to enhance the emerging nexus between trade, industrialization and services. These include reducing non-tariff barriers, removing the limitations to the development of productive capacities and providing the necessary trade-enabling infrastructure, trade finance and information, and improvements in factor market integration.
Despite achievements towards regional integration of Africa, the continent continues to face several challenges. Limited implementation of Assembly and Executive Council Decisions and slow reporting to AU treaty monitoring bodies on measures undertaken by Member States to implement their commitments remain persistent challenges. Unless the rate of Member States complying with and implementing decisions of the Union is accelerated, it will be difficult to realise regional integration. This is compounded by slow ratification and domestication of key legal instruments of the Union.
Though not explicitly about the AfCFTA, it highlights the challenges faced. While some propose that ‘national governments would be prudent to put the long-term goal of regional integration above short-term domestic consideration’ (Fofack and Mold 2021, 7), experience suggests that national politics invariably trump regional commitments.
In light of the complex arrangements around the AfCFTA, the Council of Ministers Responsible for Trade (Accra, Ghana, 10 October 2021) ‘recognised the critical importance of the role of the Assembly in advancing progress in the implementation of the AfCFTA’ and recommended an annual Extraordinary AfCFTA Summit (African Union 2022a). This may go some way to ensuring political momentum and deciding on clear task division. UNECA (2021b) further proposes the creation of ‘working teams, multi-stakeholder dialogue mechanisms and inter-ministerial and legislative cooperation committees to create cohesion across critical agencies’, where these might share responsibility with national bodies for liaison and cooperation with civil society, domestic regulators, private sector representatives, and academia and think tank representatives (UNECA 2022). This may allow a more ‘problem-driven’ approach
Lest this chapter appear overly pessimistic, it is useful to return to The Economist. Referring to ‘lack of staff’, ‘lack of powers to enforce decisions’, and ‘dreadfully slow decision-making procedure’, the article concluded that the treaty ‘is not being applied’. But the article was not on African integration but Europe in 1982.26 With the benefit of hindsight, the African continent can avoid some of the more obvious pitfalls, learn the ‘right lessons’ (Mold 2021), and in the long run realise many of the expectations being placed on such a momentous continental free trade agreement.
References
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AU Assembly 2021 ‘Decision on the Outcome of the Second Mid-Year Coordination Meeting between the African Union, the Regional Economic Communities and Regional Mechanisms’. Adopted at the 34th Ordinary Session of the AU Assembly held in Addis Ababa, Ethiopia, on 6–7 February. Assembly/AU/6 (XXXIV).
AU/EU 2021. ‘Joint Communiqué’. Adopted at the 2nd African Union–European Union Foreign Affairs Ministerial Meeting held in Kigali, Rwanda, on 25–26 October. URL: <https://www.consilium.europa.eu/media/52671/20211026-au-eu-fam-meeting_joint-communiqué.pdf> (accessed: 30 June 2022).
Mene, Wamkele K. 2020. ‘Statement by the Secretary-General of the AfCFTA Secretariat, H.E. Wamkele Mene, at the 13th Extraordinary Session of the Assembly of Heads of State and Government on AfCFTA’, 5 December. URL: <https://au.int/en/speeches/20201205/statement-he-wamkele-mene-13th-extraordinary-session-assembly> (accessed: 30 June 2022).
MFARI 2016. ‘Letter to the Chairman and Members of the INTA Committee of the European Parliament’, November. Minister of Foreign Affairs and Regional Integration of the Republic of Ghana. URL: <https://www.bilaterals.org/IMG/pdf/ghana_letter.pdf> (accessed: 30 June 2022).
Tralac 2020. ‘Trade in services negotiations under the AfCFTA’. Stellenbosch: Trade and Law Centre. URL: <https://www.tralac.org/documents/resources/faqs/3190-trade-in-services-negotiations-under-the-afcfta-q-a-march-2020/file.html> (accessed: 30 June 2022).
Tralac 2022. ‘Status of AfCFTA Ratification’, 22 April. Stellenbosch: Trade and Law Centre. URL: <https://www.tralac.org/resources/infographic/13795-status-of-afcfta-ratification.html> (accessed: 30 June 2022).
UNCTAD 2022. Database on the African Continental Free Trade Area (AfCFTA): Tariff Elimination Schedules for AfCFTA Countries. Geneva: UN Conference on Trade and Development. URL: <https://inf-dmz-afcfta-frontend-uat.azurewebsites.net/tariffs;reporter=566;partner=51> (accessed: 30 June 2022).
Literature
Appiah-Nyamekye Sanny, Josephine and Jaynisha Patel 2021. ‘Africa launched its free trade zone in January. Here’s what Africans think about economic integration’. Afrobarometer, 31 March. URL: <https://afrobarometer.org/blogs/africa-launched-its-free-trade-zone-january-heres-what-africans-think-about-economic> (accessed: 30 June 2022).
Laperle-Forget, Lolita 2021. ‘Gender-Responsiveness in Trade Agreements – how does the AfCFTA fare?’, tralacBlog, 17 March. URL: <https://www.tralac.org/blog/article/15141-gender-responsiveness-in-trade-agreements-how-does-the-afcfta-fare.html> (accessed: 30 June 2022).
Luke, David, Melaku Desta, and Simon Mevel 2021. ‘The European Union is undermining prospects for a free trade agreement with Africa’, LSE Firoz Lalji Institute for Africa Blog [London], 14 December. URL: <http://eprints.lse.ac.uk/113204/> (accessed: 30 June 2022).
Luladay Berhanu Mengistie 2021. ‘Ambiguities in the AfCFTA Text: Red Herrings or Problems with Bearing on the Implementation of the AfCFTA’, Afronomics Law [Nairobi], 15 December. URL: <https://www.afronomicslaw.org/category/analysis/ambiguities-afcfta-text-red-herrings-or-problems-bearing-implementation-afcfta> (accessed: 30 June 2022).
Macleod, Jamie and David Luke 2022. ‘Breathing Life into the AfCFTA: Why the details matter’. Winepeg, Manitoba: International Institute for Sustainable Development. URL: <https://www.iisd.org/articles/afcfta-agreement-lifeless-until-technical-issues-tackled> (accessed: 30 June 2022).
Tavengerwei, Rutendo, Valary Mumbo, and Beatriz Kira 2022. ‘What to Consider Ahead of the AfCFTA Phase II Negotiations: Focus on Digital Trade Policy Issues in Four Sub-Saharan African Countries’. Blavatnik School of Government, University of Oxford (= Digital Pathways at Oxford Paper Series 16.).
Websites
African Union 2022. ‘The African Continental Free Trade Area’. URL: <https://au.int/en/african-continental-free-trade-area>.
AUC Department of Economic Development, Trade, Industry, Mining. URL: <https://au.int/en/etim>.
Trade Law Centre (tralac, Stellenbosch). URL. <https://www.tralac.org>.
The author would like to acknowledge the helpful review comments and input from Trudi Hartzenberg, Alan Hirsch, Wumi Kolawole, Jamie Macleod, Jaime de Melo, and Jan Vanheukelom. Any errors remain those of the author alone.
Xinhuanet [Beijing], 6 January 2021.
ETIM became ETTIM as of February 2022 with the addition of tourism (AU Council 2022a, §77).
The Economist [London], 26 March 2022.
The directorates are for trade in goods and competition; customs administration; trade in services; investment, international property rights, and digital trade; dispute settlement and legal affairs; administration of human resources management; finance; and institutional matters and programme coordination.
It also compares with a staff of 1,681 at the AUC after the institutional reform across all departments (see Ulf Engel, this Yearbook, chapter 3).
Kenyan Wall Street [Nairobi], 24 February 2021.
AfCFTA Secretariat official, 20 September 2021. <https://twitter.com/afcfta/status/1440009224885579779>.
These states were Angola, Burkina Faso, Cameroon, Central African Republic, Chad, Côte d’Ivoire, Congo, Djibouti, Egypt, Eswatini, Ethiopia, Equatorial Guinea, Gabon, The Gambia, Ghana, Guinea, Kenya, Lesotho, Mali, Mauritania, Mauritius, Namibia, Niger, Nigeria, Rwanda, the Saharawi Arab Democratic Republic, São Tomé and Príncipe, Senegal, Sierra Leone, South Africa, Togo, Tunisia, Uganda, and Zimbabwe. See African Union (2022b).
See Financial Afrik [Dakar], 15 February 2022.
Nonetheless, only offers from customs unions whose members have ratified the instrument or whose rules allow for individual implementations will be allowed to trade in accordance with the AfCFTA according to Mengistie (2021).
African Business [London], 4 February 2022.
African Business [London], 12 April 2022.
ICIR (International Centre for Investigate Reporting) [Abuja], 6 March 2022.
Africa Union Press Release [Addis Ababa], 20 March 2018.
Angola, Algeria, Benin, Botswana, Burkina Faso, Burundi, Cameroon, the Central African Republic, Cape Verde, Chad, Comoros, Congo, Côte d’Ivoire, Democratic Republic of Congo, Egypt, Eswatini, Equatorial Guinea, Gabon, The Gambia, Ghana, Guinea, Guinea Bissau, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Morocco, Namibia, Niger, Nigeria, Rwanda, São Tome and Príncipe, Senegal, Seychelles, Sierra Leone, South Africa, Sudan, Tanzania, Togo, Uganda, Zambia, and Zimbabwe.
Afreximbank Press Release [Cairo], 9 February 2022.
One example of this point from the AfCFTA secretary-general: Ocnus.Net, 1 January 2021. URL: <http://www.ocnus.net/artman2/publish/Business_1/The-AfCFTA-s-Wamkele-Mene-It-s-going-to-be-difficult-but-we-ve-got-to-do-it.shtml> (accessed: 30 June 2022).
African Business [London], 4 February 2022.
For example, the EU as an interim EPA trade agreement with Madagascar, Mauritius, Seychelles, and Zimbabwe.
ECPDM Briefing Notes [Maastricht], 25 October 2021.
Africa Union Press Release [Addis Ababa], 20 March 2018.
See URL: <https://africanbusinesscouncil.org/#aboutUs> (accessed: 30 June 2022).
The ICOYACA describes itself as an affiliate initiative of You Lead Africa, a Youth Leadership Programme, which is a joint initiative of a Tanzanian training centre (MS–TCDC) associated with the international NGO ActionAid Denmark and the EAC, ‘under the AfCFTA Youth Inclusion Accelerator Project’, a GIZ and MS-TCDC initiative.
This reflects the percentage of respondents who agree/agree very strongly with the following statements: (1) ‘In order to develop, our country must rely on trade with the rest of the world, including by opening our borders to foreign imports’; or (2) ‘In order to develop, our country must rely on local production and protect local producers from foreign competition’.
The Economist [London], 20 March 1982.