The African Continental Free Trade Area (AfCFTA), the world’s largest free trade agreement by country participation, is beginning to take shape despite the initial hurdles of integrating 54 nations. The AfCFTA spans a market of 1.3 billion people and represents a combined GDP of $3.4 trillion, offering enormous potential for economic growth, intra-African trade, and investment. Since its establishment in February 2020, the AfCFTA has aimed to reduce trade barriers and increase economic cooperation across the continent, with the promise of lifting millions out of poverty.
Though the agreement has faced implementation delays, recent developments signal that Africa is making strides toward its vision of economic integration. Leaders from both the private and public sectors will meet in Kigali, Rwanda, this week for the second edition of the AfCFTA Business Forum, Biashara Afrika, where they will discuss the challenges and opportunities presented by this ambitious trade area. Ahead of the event, Wamkele Mene, Secretary General of the AfCFTA, shared insights with CNN’s Eleni Giokos on the progress made and the road ahead.
Initial hurdles in sstablishing AfCFTA
Since its inception, AfCFTA has faced significant challenges, stemming largely from the fragmented nature of Africa’s economies. Mene acknowledged the enormity of the task. ‘One of the reasons it’s challenging and will continue to be challenging for a long time is because we are a very fragmented market,’ he explained. With 47 state parties ratifying the agreement, and 42 different currencies in use across these nations, creating a unified market is a complex undertaking. Countries under the AfCFTA umbrella have vastly different levels of development, with GDP per capita ranging from $110 to $25,000. Integrating landlocked nations and least developed countries with more industrialised economies requires an intricate balancing act.
Despite these complexities, Mene believes the AfCFTA has made significant strides. ‘We were established in the middle of Covid-19 in February 2020. The following month, March 2020, the entire continent of Africa shut down,’ he said, referring to the pandemic-induced lockdowns that halted global trade. ‘For the first six to nine months, it was extremely difficult to get anything done.’ Nevertheless, AfCFTA has concluded all key protocols and rules, including those governing digital trade, local content for textiles and clothing, the automotive sector, and the creation of a dispute settlement mechanism. Mene sees these achievements as a major step forward, laying the groundwork for economic integration.
Transition from negotiation to implementation
Mene is optimistic that AfCFTA has moved beyond the negotiation phase into implementation. In 2022, seven African countries piloted the trade area by adopting customs systems and gazetting the AfCFTA into their national laws. By October 2024, Mene predicts that 37 countries will be ready to begin trading under AfCFTA rules. These developments mark a positive shift, reflecting the growing momentum toward realising the vision of a united African market.
‘By readiness, we mean they introduced the customs systems, they gazetted the AfCFTA into their national law,’ Mene explained. ‘This October, there will be 37 countries at a state of readiness and trading under the rules and preferences.’ The growing number of countries implementing the AfCFTA is a significant sign of progress. Despite the slow start, Mene remains confident that the benefits of the agreement will become evident over time.
Private sector as a key driver
The private sector is expected to play a crucial role in driving the success of the AfCFTA. However, some private sector leaders have expressed concerns about the slow pace of implementation. Mene acknowledged these concerns but encouraged patience. ‘The private sector is, as I always say, a co-pillar and co-driver of market integration on the continent because it’s the private sector that trades,’ he said. ‘What I would say to them is this: we are overcoming 60 years of market fragmentation. It’s not going to happen overnight.’
Mene pointed to the European Union as an example of a successful market integration model that took decades to fully materialise. ‘We know this from the experience of the European Union, which is arguably the most successful market integration model in the world today. It is over 30 years since the establishment of the European Union, and yet it still continues to have challenges.’
Overcoming barriers to trade
One of the key challenges to the AfCFTA’s success is the movement of goods and people across borders. Africa’s infrastructure is underdeveloped, with many countries lacking the transport and logistics networks needed to facilitate trade. Mene highlighted the Lobito Corridor, a railway project linking Angola, Zambia, and the Democratic Republic of Congo, as an example of critical infrastructure that will boost intra-African trade.
‘It’s not just about the trade rules, it’s about establishing the supply chain networks, the transport and logistics infrastructure that will support trade,’ Mene noted. He stressed that improving infrastructure will allow goods to transit through borders more efficiently and seamlessly.
Another significant barrier to trade is the difficulty of cross-border travel. African businessman Aliko Dangote famously remarked that he needs 35 visas to travel across the continent. Mene acknowledged that the issue of free movement of people is a major constraint on intra-African trade. ‘It’s a significant barrier and constraint to intra-Africa trade and intra-Africa investment,’ he said. Only four countries have ratified the African Union’s protocol on the free movement of persons, with concerns about national security often cited as a reason for reluctance.
A bright future for AfCFTA
Despite these challenges, Mene remains optimistic about the future of AfCFTA. He believes that with continued investment in infrastructure, regulatory harmonisation, and political will, intra-African trade could double over the next five years. ‘If in five years we can demonstrate that we have moved intra-Africa trade from, let’s say, 15 percent to 25 percent or 30 percent, that will be a very important step forward,’ he said.
Mene’s vision for AfCFTA is clear: an integrated, single African market that enables countries to trade freely and fairly with each other, driving economic growth and lifting millions out of poverty. ‘I believe that we’re going to get there,’ he said confidently. ‘In October, 37 countries will demonstrate implementation when they showcase the goods and the certificates of origin that they are trading in. At every milestone, there’s a new goalpost for us to meet, but we are making progress.’
The African Continental Free Trade Area is a bold and ambitious project, and while there are still many hurdles to overcome, the signs of progress are encouraging. With the continued commitment of African governments, the private sector, and international partners, AfCFTA has the potential to transform the continent’s economic landscape. As more countries adopt the agreement and infrastructure projects come online, Africa’s dream of a unified market is becoming a reality. The future of intra-African trade is bright, and the AfCFTA is leading the way.
Credit: Biashara Afrika & Africabriefing
