In March 2018, 44 African countries signed the African Continental Free Trade Area Agreement (AfCFTA), which commits countries to remove tariffs on 90 percent of goods, progressively liberalize trade in services, and address a host of other non-tariff barriers.
The agreement’s main objective was to create a single African market, that would make Africa the largest free trade area in the world.
However, recent reports indicate that the trade has not met its 2018 target of 17%. This was based on 2015’s baseline mark of 14.6%.
The low intra-continental trade could be attributed to lack of financing, non-tariff barriers and inadequate infrastructure. Another challenge is low manufacturing levels in some countries, which means they do not produce significant amount of goods for export.
To counter all these, sufficient mobilization of political goodwill in needed. Additionally, it is crucial to protect the interest of small-scale traders, specifically artisan traders and businesswomen in cross-border trade.
AfCTA’s scope includes trade in goods, services, investment, intellectual property rights and e-commerce.
Intra-African trade is extremely low and currently accounts for only 10% of all commerce on the continent.
AfCFTA became operational in July after meeting the ratification threshold from 22 countries.