Brief History of AfCFTA

The African Continental Free Trade Area (AfCFTA) is the culmination of a vision set forth, roughly 40 years ago, in the Lagos Plan of Action, adopted by heads of state in 1980. “That understanding led directly to the Abuja Treaty, establishing the African Economic Community in 1991… they have been the model and the engine for Africa’s integration,” said H.E. Paul Kagame, President of Rwanda, on March 21, 2018, at the 10th Extraordinary Summit of the African Union Assembly of Heads of State and Government in Kigali, Republic of Rwanda.

In light of this, the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union (AU), held in Addis Ababa, Ethiopia, in January 2012, adopted a decision to establish a Continental Free Trade Area (CFTA). As a result, the 25th Ordinary Session of the Assembly of Heads of State and Government of the AU, which was held in Johannesburg, South Africa, in June 2015, launched the negotiations for the establishment of the African Continental Free Trade Area (AfCFTA). The launch of the negotiations marked a major milestone in the implementation of the Summit Decision to establish a Continental Free Trade Area by 2017.

The main objective of the AfCFTA negotiations was to achieve a comprehensive and mutually beneficial trade agreement among the member states of the AU.

The inaugural session of the AfCFTA Negotiating Forum (AfCFTA-NF) was held in February 2016. The AfCFTA-NF established Technical Working Groups (TWGs), which supported the negotiations, one of which was on Rules of Origin (TWG on RoO). The negotiations birthed the establishment of the African Continental Free Trade Area (AfCFTA), which was signed by the AU Heads of State and Government in Kigali, Rwanda, on March 21, 2018, as one of the flagship projects of the?AU Agenda 2063.

The significance of the AfCFTA cannot be overstated. It is the world’s largest free-trade area in terms of the number of countries participating in the pact since the establishment of the World Trade Organization (WTO) in 1994.

The AfCFTA, which entered into force in May 2019, is in many respects a historic milestone towards trade liberalization and thus greater prosperity on the African continent.

On January 1, 2021, free trade officially commenced under the AfCFTA. Four days later, two Ghanaian companies became pioneer exporters of products using the AfCFTA preferences, marking a major milestone in the short but eventful history of the trade pact.

The World Bank highlights that the 55 member nations with their populations of over 1.3 billion people would have a combined gross domestic product (GDP) of $3.4 trillion.