The African Continental Free-trade Area (AfCFTA) Agreement
Stanbic IBTC Corporate and Investment Banking
Committed to driving progress across Africa
On 21 March, 2018, the African Continental Free Trade Area (AfCFTA) was signed in Rwanda by 28 African countries in creation of a free-trade area. Fifty-four of the fifty-five African countries which make up the African Union are now part of this agreement which is the largest conglomerate of sovereign countries creation of a free-trade area, while 38 countries have deposited their instruments of ratification with the depository (Chair of the African Union Commission).
The African Continental Free-trade Area (AfCFTA) agreement is focused on stimulating growth, creating employment and diversifying economies across Africa - a market of 1.2 billion people with a combined GDP in excess of 3 trillion dollars.
This agreement is instrumental in creating a comprehensive free trade agreement which aims to establish a single continental market for the free flow of goods, services and capital supported by the free movement of persons.
While trading under the agreement began on 01 January 2021, the operational phase of the agreement had been launched by the Extraordinary African Union Summit on 07 July 2019 in Niger. The intention is to remove cross-border tariffs on 97% of goods by 2030, alongside the dismantling of non-tariff barriers such as policy inconsistencies, inadequate transport infrastructure, cumbersome paper-based trade processes, and border and customs inefficiencies. The agreement will liberalise services and aim to tackle “non-tariff barriers” which hamper trade between African countries, such as long delays at the border.
The overarching objective of AfCFTA is the elimination or reduction of tariff and non-tariff barriers amongst member states by providing a single market for goods, services and investment, facilitated by movement of persons in order to deepen the economic integration and prosperity of the African continent.
For more insights on the African Continental Free Trade Agreement (AfCFTA), tune in to the ‘AfCFTA Discourse with Stanbic IBTC’ on Nigeria Info 99.3 FM every Wednesday by 6:15pm.