Q & A on the AfCFTA

AfCFTA
What you need to know
Frequently Asked
Questions & Answers
African Trade Policy Centre
Issue 1: March 2023

ii
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The AfCFTA – What You Need to Know: Frequently Asked Questions & Answersiii
Contents
Introduction ................................................................................................................. 1
1) What is the AfCFTA? What is it about, and what does it aim to achieve? .................... 3
2) When was the AfCFTA created? .............................................................................. 5
3) What does the AfCFTA aim to achieve?.................................................................... 7
4) What does the AfCFTA cover? ................................................................................. 8
5) How does the AfCFTA work? What does its institutional structure look like? .............. 10
6) Who is responsible for the implementation of the AfCFTA? ...................................... 11
7) What is the relationship between the Abuja Treaty and the AfCFTA? ......................... 12
8) How many African Union Member States have signed the AfCFTA? .......................... 13
9) How many countries have ratified the Agreement? ................................................. 13
10) Is there anything that Countries need to do after ratification or is ratification
enough for the AfCFTA Agreement to achieve its objectives? .................................. 15
11) What is the scope of trade policy and regulatory reforms that countries
must undertake to implement the Agreement? ....................................................... 16
12) How many State Parties have submitted tariff offers so far? .................................... 19
13) Can we say that the Agreement is now in operation? .............................................. 20
14) Has trade under the agreement started?................................................................ 20
15) Is there a plan to complete outstanding negotiations soon? ..................................... 21
16) Why does Africa need the AfCFTA? ....................................................................... 22
17) Will the Agreement do anything for African Industrialization? .................................. 23
18) So, can we say that the Agreement will help diversify Africa’s export markets? ......... 25
19) From a broader economic perspective, what can the AfCFTA do for Africa? .............. 27
20) Is it correct that the AfCFTA benefits the largest African countries
at the expense of the smallest ? .......................................................................... 28

iv
21) At the sectoral level, where are the largest gains expected? .................................... 29
22) Will the AfCFTA benefit Africa’s young people? ....................................................... 30
23) Will the AfCFTA benefit Africa’s women? ................................................................ 31
24) What will the AfCFTA do for Africa’s global voice?................................................... 31
25) What does the AfCFTA mean for climate change and the environment? .................... 32
26) How does the AfCFTA benefit the African private sector? ......................................... 33
27) What about Non-Tariff Barriers (NTBs)? Will the AfCFTA address these? .................. 34
28) What else does the agreement do for Africa’s cross-border traders? ........................ 35
29) Much of the Agreement seems to be focused on trade in goods.
What about services?........................................................................................... 35
30) The AfCFTA is about intra-African trade; is there space for international investors? ... 38
31) What about digitalization? Does the AfCFTA help bring Africa forward
into the fourth industrial revolution? ...................................................................... 38
32) What are the challenges that African governments, businesses,
and consumers need to be aware of and prepare themselves for? ........................... 40
33) What are the internal roadblocks, if any, that stand
in the way of fully implementing the Agreement?.................................................... 41
34) What does the AfCFTA bring to the ordinary African citizen ...................................... 44
Contents

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers1
Introduction
Exercising its mandate to promote
the economic and social develop-
ment of its member States and fos-
ter intra-African integration, the
United Nations Economic Com-
mission for Africa (ECA) has been
relentlessly supporting the effort
to establish and operationalize the
African Continental Free Trade
Area (AfCFTA) since the inception
of the idea in 2012. ECA’s support
to the AfCFTA project is led primar-
ily by the Regional Integration and
Trade Division (RITD), which works
closely with all other ECA divisions,
sub-regional offices (SROs) and the
African Institute for Economic De-
velopment and Planning (IDEP).
The African Trade Policy Centre
(ATPC) is a specialized centre of ex-
cellence within RITD that conducts
cutting-edge trade policy research
and analysis, offers capacity building
support to member States, and pro-
motes consensus building around
key strategic ideas. Established
in June 2003, the ATPC works to
strengthen the human and institu-
tional capacities of African Govern-
ments to formulate and implement
sound trade policies and participate
more effectively in trade negotia-
tions at the bilateral, regional, and
multilateral levels. ATPC also works
closely with key stakeholders in the
field of trade policy, including the
private sector, civil society, and ac-
ademia, to ensure that trade policy
serves the interests of the general
public for sustainable and inclusive
development.
Using its research and policy anal-
ysis function, ATPC has established
itself as the authoritative source of
original insights on Africa’s trade
policy options, scenarios, and likely
outcomes. ATPC has assisted the
AfCFTA process from its inception
by making the case for it, technical-
ly supporting the negotiations, and
engaging in relentless campaigns to
get the agreement ratified follow-
ing its adoption. Since the AfCFTA
Agreement entered into force, too,
the ATPC has been supporting State
Parties to develop and execute in-
clusive national AfCFTA implemen-
tation strategies.
Now that AfCFTA has become – at
least technically – part of national
law and regulation in over 85% of

2
Introduction
the AU member States, ATPC is cur-
rently focusing on how to take the
AfCFTA a step closer to the ground
so that the ordinary African citizen
can make sense of what the free
trade area is all about and exploit its
opportunities. Indeed, the AfCFTA
will realize its potential to the full
only if Africans, and particularly the
African business community, under-
stand, own and take advantage of it.
However, we also know that the Af-
rican business landscape is predomi-
nantly made up of small and medium
enterprises (SMEs), including wom-
en-owned businesses, who lack the
capacity to invest in understanding
the opportunities created by the Af-
CFTA. This information asymmetry
needs to be bridged over time.
In this regard, ECA is pleased to
launch this information booklet,
titled AfCFTA: What You Need to
Know, which asks sometimes highly
technical questions about the Af-
CFTA and attempts to answer them
in a language that is accurate but
also non-technical and accessible at
the same time. The overall objective
of this information booklet is to help
enhance awareness about the Af-
CFTA among the business commu-
nity and the general public.

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers3
The Framework of the African Continental Free Trade Area
(AfCFTA)
1) What is the AfCFTA? What is it about, and what does
it aim to achieve?
1
See GATT Art. XXIV:8(b).
2 Ibid
The ‘AfCFTA’ stands for the African
Continental Free Trade Area which
was established in 2018 via the Af-
CFTA Agreement as negotiated by
Member States of the African Union
(AU). To understand what the Af-
CFTA is one must first understand
what a Free Trade Area (FTA) is.
An FTA is an arrangement between
two or more countries which seeks
to create conditions for the free
flow of trade amongst themselves.1
In practice this means countries es-
tablishing FTAs agree not to charge
import tariffs, i.e. taxes on imported
goods, or other barriers from other
members of the FTA bloc.
To better understand an FTA, it is
useful to compare it with the related
concept of a customs union. A cus-
toms union is defined as the substi-
tution of a single customs territory
for two or more customs territories
with free movement of goods across
borders within the customs union
and a common external trade regime
towards third parties 2
. Put differ-
ently, a customs union is a trade ar-
rangement in which a group of coun-
tries charge a common set of tariffs
to those countries outside the union
while granting free trade among
themselves. Like an FTA, therefore,
a customs union also aims to create
conditions for the free movement
of goods among the parties to the
agreement that established the cus-
toms union. However, unlike an FTA,
a customs union establishes a com-
mon external trade regime, which
means all the parties to the customs
union apply the same tariffs and re-
lated regulations on goods coming
from outside the customs union. As
a result, a customs union is deeper
and more ambitious than an FTA.

4
The Framework of the African Continental Free Trade Area (AfCFTA)
FTAs and customs unions are col-
lectively referred to as regional
trade agreements (RTAs), or prefer-
ential trade agreements (PTAs). The
AfCFTA establishes an FTA among
its State Parties in the sense that
each country that is a party to the
AfCFTA Agreement works towards
creating conditions for increasingly
free flow of trade. But the AfCFTA
is not a customs union yet because
each of the State Parties retains
the policy space to freely set their
own external tariffs and other reg-
ulations vis-à-vis third countries,
i.e. non-African countries as well as
African countries that are not yet
parties to the AfCFTA Agreement.
Note, however, that the above de-
scription focuses exclusively on
trade in goods because the Gener-
al Agreement on Tariffs and Trade
(GATT) of 1947 that first estab-
lished the multilateral trading sys-
tem – and therefore first introduced
these concepts – was limited in its
ambition to goods. The AfCFTA is
much more ambitious; it already
covers goods, services, and dispute
settlement, and aims to bring sev-
eral new areas of regulation into its
remit – including investment, intel-
lectual property, competition policy,
digital trade, and women and youth
in trade. More will come on each of
these below. Indeed, a key objective
of the AfCFTA is to lay the foun-
dations for a Continental customs
union and a single market.

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers5
2) When was the AfCFTA created?
3 Article 23 of the Agreement specifies that the Agreement would enter into force 30 days after the
deposit of the 22nd instrument of ratification. On 30 April 2019 the Democratic Republic of Congo
deposited its instrument of ratification making it the 22nd country to deposit and entering the 30
day period. Over the course of the 22 day period Sierra Leone and Zimbabwe also deposited their
instruments of ratification thus making 24 countries by the date of entry into force.
4 Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia
The Agreement Establishing the Af-
rican Continental Free Trade Area
(AfCFTA Agreement) was conceived
during the 18th Ordinary Session of
the Assembly of Heads of State and
Government of the African Union
(AU) in January 2012. The negotia-
tions for the Continental Free Trade
Area (CFTA) - as it was then called -
were launched on 15 June 2015 at
the Johannesburg summit of the AU
Assembly.
The first meeting of the AfCFTA Ne-
gotiating Forum, composed of the
Chief Trade Negotiators from the
governments of the Member States,
was held in February 2016. When
the negotiations concluded on 21
March 2018, the AfCFTA Agreement
and its three protocols - goods, ser-
vices, and dispute settlement - were
adopted. On the day of its adoption,
44 AU member states signed the
Agreement, thus sending the most
powerful political signal possible
about the significance of the Agree-
ment. Barely 14 months later, by 30
May 2019, 24 States had ratified the
Agreement, surpassing the minimum
threshold of 22 ratifications required
for it to enter into force3
.
As of February 2023, 54 countries
have signed the Agreement, which
means they have taken a political
commitment to support it, while 46
countries have ratified it, meaning
they have gone a step further and
taken the necessary constitutional
steps at the national level to imple-
ment the Agreement as a matter of
binding law on the state.
Trading under the AfCFTA formal-
ly commenced on 1 January 2021;
however, it is important to note
that until July 2022 no meaningful
trade had taken place. In July 2022
a program titled the ‘AfCFTA-Guid-
ed Trade Initiative’ was announced
and trade officially began in October
2022 as a pilot amongst 8 participat-
ing countries4
.

6
The Framework of the African Continental Free Trade Area (AfCFTA)
Timeline & Milestones of the AfCFTA
June
2015
May
2016
May
2019
Jan.
2021
July
2022
Feb.
2023
Feb.
2016
Feb.-July
2017
March
2018
Feb.
2020
Oct.
2022
Negotiations
Begin
First AfCFTA Negotiating
Forum held
Agreement & Adoption of
12 Negotiating Guiding
Principles
Negotiations &
Agreement on 90% Tariff
Liberalization
Phase I Negotiations
Concludes
Decision taken to add
Protocol on Women and
Youth in Trade & Protocol
on Digital Trade
AfCFTA Guided Trade
Initiative Officially
Launched
AfCFTA Enters
into Force
Trading formally
begins
AfCFTA Guided Trade
Initiative Announced
AU Assembly adopts
three protocols:
Competition, Intellectual
Property and Investment

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers7
3) What does the AfCFTA aim to achieve?
5 https://au-afcfta.org/purpose-the-afcfta/
6 https://au.int/sites/default/files/treaties/36437-treaty-consolidated_text_on_cfta_-_en.pdf
The overarching goal of the AfCFTA
is to establish an integrated African
market that enables the free flow of
goods and services across Africa’s
internal borders. The Agreement
also seeks to boost Africa’s trading
position in global markets 5
. Broadly
speaking the AfCFTA seeks to ac-
complish eight strategic objectives 6
:
a) To create a single market for
goods and services
b) To liberalize tariffs in goods and
services markets
c) To support the movement of
capital and persons whilst facil-
itating investments that build
on State Parties and REC initia-
tives
d) To lay the foundation for a Con-
tinental Customs Union
e) To promote sustainable and
inclusive socio-economic de-
velopment considering gender
equality and structural transfor-
mation
f) To increase competitiveness of
State Parties both intra-conti-
nentally and globally
g) To promote industrialization
and diversification, regional
value chain development, agri-
cultural development, and food
security, and
h) To resolve the challenges of
multiple and overlapping mem-
berships of countries in regional
economic communities (RECs)
and expedite the regional and
continental integration pro-
cesses.

8
The Framework of the African Continental Free Trade Area (AfCFTA)
4) What does the AfCFTA cover?
The Agreement Establishing the
AfCFTA is a package of legal instru-
ments constituting a framework
agreement and several protocols;
each protocol may have its own re-
spective annexes and appendices.
The negotiations to establish the
AfCFTA have been conducted in two
phases. Phase I of the process start-
ed in 2015 and concluded with the
adoption of the AfCFTA Agreement
and three protocols – on trade in
goods, on trade in services, and dis-
pute settlement in March 2018.
However, negotiations are still con-
tinuing on a number of technical
instruments, such as the annex on
rules of origin (RoO), national sched-
ules of tariff concessions on goods,
and national schedules of specific
commitments on services, that are
Single Market for Goods
& Services
Resolve Overlapping
Intricacies of RECs
Tariff
Liberalization
Promote Industrialization,
Diversificatiopn, and
Resilience
Increase Intra-Continental
Competition
Facilitate Investment and
Free Movement of Capital
Promote Inclusive &
Gender Sensitive
Socio-Economic
Development
Objectives of the AfCFTA

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers9
essential to complete and operation-
alize the Phase I instruments in full.
Phase II of the negotiations, which
are underway today, aim to produce
protocols in five different but relat-
ed areas – investment, competition
policy, intellectual property rights,
digital trade or ecommerce, and
women and youth in trade.
The draft protocols on the first
three areas were adopted by the
AU Assembly at its meeting in Addis
Ababa, Ethiopia, on 19-20 February
2023, while the negotiations on the
remaining two areas are expected
to be concluded within 2023. Once
completed, the AfCFTA will cover
most facets of trade policy and will
certainly be the most comprehen-
sive economic agreement Africa has
established.
AfCFTA Agreement
Phase I

 





Phase II
Adopted Under Negotiation
Competition
Policy
Investment
Intellectual
Property Rights
Digital Trade
Women and
Youth in Trade
Protocol on
Trade in Goods
Protocol on
Trade in Services
Protocol on
Dispute
Settlement

10
The Framework of the African Continental Free Trade Area (AfCFTA)
5) How does the AfCFTA work? What does its
institutional structure look like?
7 https://au.int/sites/default/files/treaties/36437-treaty-consolidated_text_on_cfta_-_en.pdf
Article 9 of the AfCFTA Agreement
lays down an elaborate institutional
framework to operationalize the Af-
CFTA. The framework consists of
four pillars7
:
a) The Assembly of Heads of State
and Government;
b) The Council of Ministers;
c) The Committee of Senior Trade
Officials; and
d) The Secretariat
• The Assembly is the high-
est decision-making body at
the African Union (AU) that
provides oversight and guid-
ance on the AfCFTA. The As-
sembly has the authority to
adopt interpretations of the
agreement that are binding
on State Parties. (Article 10)
• The Council of Ministers is
designed as a high-level body
consisting of Trade and other
Ministers officially designated
by State Parties. The Council
of Ministers reports to the As-
sembly through the Executive
Council. The Council of Minis-
ters is ultimately responsible
for the operationalization of
the Agreement and has pow-
ers, amongst others, to es-
tablish standing committees
for implementing protocols,
to supervise the work of such
committees, to receive and
consider reports on the activ-
ities of the Secretariat, to is-
sue regulations and directives
within the limits set by the
Agreement, and to make rec-
ommendations to the Assem-
bly for adoption. (Article 11)
• The Committee of Senior
Trade Officials is tasked with
implementing decisions made
by the Council of Ministers.
Members of the Committee
are designated by State Par-
ties and are responsible for de-
veloping programmes and ac-
tion plans for implementation
of the Agreement. The Com-
mittee also monitors progress,
authorizes investigations into
any issues arising in relation to

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers11
implementation of the Agree-
ment, and directs the Secretar-
iat to undertake specific tasks.
In addition to State Parties, re-
gional economic communities
(RECs) are also represented
in the Committee in an advi-
sory capacity. The Committee
meets at least twice a year and
submits its reports, findings,
and recommendations to the
Council of Ministers. (Article
12)
• The Secretariat is a function-
ally autonomous body within
the AU system with an inde-
pendent legal personality.
Based in Accra, Ghana, the
AfCFTA Secretariat is “the
administrative organ man-
dated to coordinate the im-
plementation of the AfCFTA”.
8 https://au-afcfta.org/secretariat/
Its responsibilities include the
convening of meetings, mon-
itoring and evaluating imple-
mentation of the Agreement,
and other duties as assigned
to it8
. (Article 13)
• Thematic committees: In ad-
dition to the above, each of
the protocols has its own bod-
ies created by the protocols
themselves, such as the Dis-
pute Settlement Body (DSB),
or established by the Council
of Ministers, such as the Com-
mittee on Trade in Goods and
the Committee on Trade in
Services. In all cases, the pri-
mary responsibility of these
bodies is to facilitate the oper-
ation of the relevant protocols
and further their objectives.
6) Who is responsible for the implementation
of the AfCFTA?
The AfCFTA is a Continental trade
arrangement with a strong institu-
tional framework. As such, at the
continental level, the AfCFTA Sec-
retariat plays a critical role in its
capacity as the one institution man-
dated to coordinate implementa-
tion of the AfCFTA. Yet, at its core,
the Agreement is one amongst sov-
ereign states. The ultimate respon-

12
The Framework of the African Continental Free Trade Area (AfCFTA)
sibility for the Agreement’s imple-
mentation therefore lies with each
individual State Party to the Agree-
ment. To implement the Agreement
as per its letter and spirit, State Par-
ties need to have the requisite polit-
ical will and technical capacity.
One way in which State Parties
are trying to ensure effective im-
plementation of the Agreement is
through National AfCFTA Imple-
mentation Strategies in which they
9 https://trade4devnews.enhancedif.org/en/op-ed/implementing-afcfta-2021
10https://au.int/sites/default/files/treaties/37636-treaty-0016_-_treaty_establishing_the_african_
economic_community_e.pdf
11https://au.int/sites/default/files/treaties/37636-treaty-0016_-_treaty_establishing_the_african_
economic_community_e.pdf
identify strategic areas of national
interest within the framework of
the AfCFTA and specify relevant
interventions necessary to benefit
from the Agreement.9
Finally, implementation of the Af-
CFTA will not mean anything until
the private sector – manufacturers
and farmers, bankers and telecoms
operators, importers and exporters,
etc. – understand, appreciate, em-
brace and champion it.
7) What is the relationship between the Abuja Treaty
and the AfCFTA?
The Abuja Treaty, formally known
as the Treaty Establishing the Afri-
can Economic Community, was ad-
opted on 3 June 1991 in Abuja, Ni-
geria 10 . The treaty was established
in order to:
“Promote economic, social and cul-
tural development and the integra-
tion of African economies in order
to increase economic self-reliance
and promote an endogenous and
self-sustained development”11.
In this regard, the Abuja Treaty and
the AfCFTA have similar aims and,
in fact, the AfCFTA is an important
tool designed to achieve the in-
tegration vision articulated in the
Abuja Treaty. The development of
the RECs and subsequent bilateral
agreements have all been steps to-

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers13
wards African integration. The Af-
CFTA seeks to build upon this mo-
12 Data from UNCTADStat, Accessed September 2022. Note: Total Trade defined as the sum of ex-
ports and imports to/from Africa at the individual country level
mentum and help Africa realize the
vision contained in the Abuja Treaty.
AfCFTA State of Play (February 2023)
8) How many African Union Member States have
signed the AfCFTA?
As of February 2023, 54 of the 55
AU Member States have signed the
Agreement. Eritrea is the only ex-
ception, so far.
9) How many countries have ratified the Agreement?
As of February 2023, 46 countries,
or about 85% of the signatories
of the Agreement, have ratified it.
These 46 countries represent 94%
of Africa’s GDP, 88% of its popula-
tion and 94% of its total trade12
. The
importance of this cannot be over-
stated as the speed of this ratifica-
tion process is unprecedented for an
agreement of this nature in African
history. When it entered into force
on 30 May 2019 the Agreement
became legally binding and now, for
the 46 countries that have ratified,
the rules and obligations contained
in the AfCFTA Agreement are bind-
ing and supersede any established
national laws and practices that are
inconsistent with the provisions of
the AfCFTA Agreement.

14
AfCFTA State of Play (February 2023)

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers15
10) Is there anything that
Countries need to do after
ratification or is ratification
enough for the AfCFTA
Agreement to achieve its
objectives?
For the AfCFTA to realize its ob-
jectives, ratification is only the first
step. Once they have ratified the
Agreement, State Parties need to
take several additional steps, both
individually as well as collectivel y.
Individually, once they have ratified
the Agreement, State Parties need
to translate the rules and obligations
specified by the Agreement into
domestic laws, regulations, institu-
tions, and administrative practices.
These efforts are critical to ensure
domestic law does not conflict with
the commitments contained in the
AfCFTA Agreement. This is a com-
plex undertaking that takes time,
resources, and perseverance. In
many cases, new institutions may
have to be established, new practic-
es introduced, capacities created,
approaches adopted and, in some
cases, political resistance overcome.
Translate
Obligations of
Agreement
into National
Laws
Submit
Schedule of
Tariff
Concessions
Submit
Schedule of
Specific Service
Commitments
Technical
Verification of
Goods & Services
Commitments
Annexing Goods and Services
Schedules to the AfCFTA Agreement
for each State Party
Deposit
instrument of
ratification
with AUC
Chairperson
Ratification
of AfCFTA
Steps Necessary to
Implement the AfCFTA
Agreement
(not linear, not exhaustive)
Giving Effect to Schedules
through National Tariff
Books and Related
Regulatory instruments

16
AfCFTA State of Play (February 2023)
At the continental level, each State
Party also needs to submit detailed
schedules of tariff concessions on
the importation of goods and similar
schedules of specific commitments
on services. These schedules for the
reduction and elimination of trade
barriers must be validated at conti-
nental level and applied by national
customs authorities and other reg-
ulatory agencies. Only then can we
say the AfCFTA is in fact being im-
plemented to make trading across
African borders easier.
11) What is the scope of trade policy and regulatory
reforms that countries must undertake to implement
the Agreement?
In implementing the AfCFTA Agree-
ment, different African countries
start from different positions de-
pending on the kind of policies and
regulations they had prior to the
entry into force of the Agreement.
For example, most AfCFTA State
Parties are already members of the
WTO, which means they are likely
to have put in place trade policies,
regulations, and institutions that
aim to create a conducive trade en-
vironment that reflect WTO law.
In these countries, most of the Af-
CFTA-inspired changes are only
incremental in nature; they are not
innovations. Likewise, virtually all
AfCFTA State Parties participate
in one or more RECs within Africa,
which are meant to serve as building
blocks for the AfCFTA itself. As a re-
sult, the AfCFTA-inspired reforms
build on existing regional and global
frameworks, which should make the
process of AfCFTA implementation
at the national level relatively easier
to manage.
Yet, the level of trade liberalization
envisaged in the AfCFTA is quite am-
bitious. For example, AfCFTA State
Parties have agreed to eliminate
tariffs on 97% of tariff lines over an
agreed period of time while they al-
lowed themselves the freedom to
exclude a maximum of 3 percent of
total tariff lines from liberalization.
Of the 97% of products whose tar-
iffs are slated for reduction and elim-
ination, there are two categories:

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers17
1. For the first 90% of products,
tariffs will be eliminated over
five years in the more advanced
African countries (the develop-
ing countries) and over ten years
for the less advanced countries
(the least-developed countries
or LDCs).
2. The remaining 7% of tariff lines,
designated as sensitive, will still
be reduced and eliminated, but
over a longer timeframe: the de-
veloping African countries would
do this over 10 years, while the
LDCs are given 13 years13
. In all
cases, the reductions take place in
equal annual instalments.
As an example, a product falling
within the 90% category that,
upon importation to a develop-
ing African country, attracted
a duty of 25 percent in 2020
would only be subject to a 20%
duty in 2021, 15 % in 2022, and
so on until the tariff becomes
zero in 2025. This process
would take 10 years for LDCs.
What this means, in practice, is
that 13 years from the date of
entry into force of the AfCFTA
13 LDCs have the option to start liberalizing sensitive products 5 years after the start of trading under
the Agreement, i.e. until 1 January 2026. However, the end date for tariff liberalization would remain
the same.
Agreement – i.e. by 2033, trade
in 97% of all goods originating in
Africa should be traded across
borders free of any customs
duties or other charges having
equivalent effect.
It is also important to note that the
Agreement has built in safeguards
to make sure tariff liberalization
happens in a broad-based manner
through what is called a ‘double
qualification component’. Through
this qualification each State Party
must ensure that the 90% of tariff
lines it reduces and eliminates over
the implementation period rep-
resents at least 90% of its imports
from the rest of Africa. To provide
a simple example, if a country’s total
imports from Africa consisted of 10
items but the proportion, by value,
of those items was heavily skewed
to just one, comprising, say, 30% of
that country’s overall imports from
within Africa over a previous repre-
sentative period, the double quali-
fication component would bar that
country from including that partic-
ular item in its sensitive or excluded
list. In practice the double qualifica-

18
AfCFTA State of Play (February 2023)
tion standard ensures that the de-
cision to eliminate tariffs on 97% of
tariff lines does not end up impact-
ing adversely on the small amount
of goods coming into that country
from the rest of Africa and reduces
the risk of future protective barriers
being imposed.
First 90% of
Tariff Lines
(General)
Next 7%
(Sensitive)
Final 3%
(Excluded)
On the first 90% of tariff
lines, tariffs are to be
liberalized according to
a normal schedule
On the next 7% of tariff
lines countries have
additional time to
remove tariffs
On the next 3% of
tariff lines countries
have the right to
maintain tarrifs
Illustration of Tariff Liberalization Schedules
for Developing Countries

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers19
12) How many State Parties have submitted
tariff offers so far?
As of January 2023, 46 Member
States have submitted their tariff
offers (including 4 from Customs
Unions) while 36 have been techni-
cally verified. By technical verifica-
tion we mean the process by which
the draft schedules, prepared and
submitted by individual State Par-
ties, are checked by the Secretariat
for technical accuracy and compli-
ance with the tariff reduction for-
mulae described above, after which
they are presented before the
Council of Ministers for adoption.
Only then can the national sched-
ules of concessions become legally
binding instruments and included as
Annex 1 to the AfCFTA Protocol on
Trade in Goods for that particular
State Party.
Illustration of Timeline for Tariff Liberalization
for 90% of Tariff Lines in Developing Countries
2021
2023
2025
2022
2024
Year 1:
20%
Year 2:
15%
Year 3:
10%
Year 4:
5%
Year 5:
0%
Initial
Tariff:
25%
2020

20
AfCFTA State of Play (February 2023)
The approach adopted for ser-
vices-liberalization started with
the identification of a minimum of
five priority sectors for negotia-
tions – transport, communication,
finance, tourism and business ser-
vices. Plans are already in place to
bring into negotiations the services
14 See Statement by the AfCFTA Secretariat Secretary-General to the Ninth (9th) Meeting of the
Council of Ministers (CoM) of the African Continental Free Trade Area (AfCFTA), 26 July 2022, Af-
CFTA/COM/9/REPORT/DRAFT, paras. 54 ff.
sectors that have not been chosen
as priorities in the first phase. On
that basis, as of January 2023, all
Member States, except three, have
submitted their services liberaliza-
tion offers for technical verification
by the Secretariat.
13) Can we say that the Agreement is now in operation?
Yes, the ‘operational phase’ of the
AfCFTA was launched by an Ex-
traordinary AU Summit in Niamey,
Niger, on 7 July 2019 and 1 January
2021 was set as the date for ‘start of
trading’ under the AfCFTA Agree-
ment. Therefore, the Agreement
is operational for those Member
States that have ratified it.
14) Has trade under the agreement started?
As noted above, while the opera-
tional phase of the Agreement was
launched as early as July 2019,
three years later, in July 2022, the
SG of the AfCFTA Secretariat stat-
ed that “trading under the AfCFTA
preferences has not taken place”.14
There are several factors behind that,
the Covid-19 pandemic being one.
Also, several additional instruments,
including agreed rules of origin and
the schedules of concessions and
commitments, needed to be in place
for actual trade to start. The nego-
tiations on these instruments are in
their final stages. Indeed, as indicat-
ed above, in October 2022, the Af-
CFTA Council of Ministers launched
the AfCFTA Guided Trade Initiative,
a pilot project involving eight select-

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers21
ed countries – Cameroon, Egypt,
Ghana, Kenya, Mauritius, Rwanda,
Tanzania, and Tunisia – which seeks
to facilitate commercially meaningful
15 https://au.int/sites/default/files/decisions/41583-Assembly_AU_Dec_813-838_XXXV_E.pdf
trade among State Parties that have
met the minimum requirements for
trading under the Agreement.
15) Is there a plan to complete outstanding
negotiations soon?
Yes. In February 2022 the Assem-
bly put forth a directive endorsing
the start of trading under Provision-
al Schedules of Tariff Concessions
pending the conclusion of all out-
standing issues on tariff schedules.
This was further emphasized in June
2022 by the Council of Ministers.
Additionally, the Assembly directed
the AfCFTA Secretariat to continue
facilitating negotiations.
Regarding services, the Assembly
took note of the establishment of five
sub-committees on Specific Commit-
ments, Regulatory Frameworks, Pro-
fessional Qualifications, Services-re-
lated Issues, and Services Rules. It
initially set a goal to complete nego-
tiations on the five priority sectors
identified previously (financial, com-
munication, transport, professional
services, and tourism) by the end of
June 202215
. While these deadlines
have been missed, the political com-
mitment to get the job done expedi-
tiously is unmistakable.
Phase II negotiations are also pro-
gressing. For quite some time, spe-
cialized Committees on investment,
on intellectual property rights, on
competition, on digital trade, and on
women and youth in trade have been
working hard to complete the Af-
CFTA package. The draft protocols
on the first three were adopted by
an extraordinary meeting of the Af-
CFTA Council of Ministers that was
held from 27 to 28 October 2022 in
Libreville, Gabon. At its 36th ordinary
session held in Addis Ababa, Ethio-
pio, from 18-19 February 2023, the
AU Assembly adopted these three
protocols and opened them for rat-
ification by member states.

22
Why do we need the AfCFTA? How can Africa benefit?
Why do we need the AfCFTA? How can Africa benefit?
16) Why does Africa need the AfCFTA?
16 Data from UNCTAD Stat, Accessed September 2022
17 Ibid.
18 Average tariffs faced by exporters within regions calculated with reference group weighted aver-
age tariffs based on 2013 MAcMap-hs6. For cost estimates of non-tariff barriers see, Cadot, O., A.
Asprilla, J. Gourdon, C. Knebel and R. Peters. 2015. “Deep Regional Integration and Non-tariff Mea-
sures: A Methodology for Data Analysis.” Policy Issues in International Trade and Commodities Study
Series 69, UNCTAD (United Nations Conference on Trade and Development), Geneva.
There are several reasons why the
AfCFTA is good for Africa. The Af-
CFTA promises to replace over 50
small and fragmented markets in Af-
rica with a single Continental mar-
ket of over 1.4 billion people repre-
senting about one-sixth of the global
population 16 . When consolidated,
the African market is approximately
the same size as India’s. However,
unlike India which operates as a sin-
gle market, Africa has been divided
into more than 50 unique markets,
almost all of which are individually
too small to support investment on
the scale necessary for Africa to in-
dustrialize.
To present this in quantitative
terms, as of 2021, 17 African coun-
tries had an average GDP of less
than $10 billion17
. In addition, Afri-
can traders face average tariffs of
6.9% when they trade across Afri-
ca’s 107 unique land borders. Sub-
stantial non-tariff barriers, resulting
from regulatory differences, such
as divergent sanitary, phytosani-
tary, and technical standards, raise
costs even higher by an estimated
14.3 per cent.18 Intra-African trade
is simply too costly. The power of
the AfCFTA thus lies with its ability
to integrate and consolidate Africa
into a single USD 2.4 trillion market
and thereby eliminate many of the
barriers to trade present across the
Continent.

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers23
17) Will the Agreement do anything for African
Industrialization?
19 Data from UNCTADStat, accessed September 2022
20 ERA 2013, pp. 8-9 https://archive.uneca.org/sites/default/files/PublicationFiles/unera_report_
eng_final_web.pdf
Today, Africa’s external exports, as
compared to its internal trade, are
overwhelmingly concentrated in
raw materials with little to no val-
ue addition. For example, in 2021,
Africa exported a total of USD 559
billion worth of goods, of which pri-
mary commodities comprised USD
431.5 billion, or 77% of Africa’s total
exports. To provide a slightly deep-
er look, mineral fuels in particular
accounted for approximately 34%
(USD $191.5 billion) of Africa’s glob-
al merchandise exports with a large
proportion of these exports (USD
$180 billion) being in raw petroleum
or natural gas products. In addition,
another 12% (USD 69.3 billion) of
Africa’s exports to the world were in
raw materials like Rubber, Oil Seeds,
Pulp and Textile Fibers 19
.
Africa’s export composition leaves it
exposed to several threats:
a) Primary commodities are no-
torious for their price volatility
on international markets, which
inevitably translates into unpre-
dictability in foreign currency
revenues and leaves African
countries incapable of planning
their long-term development
with any degree of certainty.
b) Commodity dependence tends
to worsen terms of trade over
the long run.
c) Commodity exports “entail huge
forgone income through lack of
value addition and the export of
jobs to countries that can add
value” 20
.
d) Evidence suggests that no
country has been transformed
by exporting raw materials. In-
dustrialization is the tried-and-
tested route for sustainable
transformation.
e) Industrialization transfers skills
and technology, creates jobs
and injects hope and dynamism
into society, whereas concen-
trating on extractive industries
does not.

24
Why do we need the AfCFTA? How can Africa benefit?
By lowering barriers to trade and
incentivizing investment across the
Continent, the AfCFTA creates a
conducive environment for African
industrialization. Thus, when we talk
about the AfCFTA as transforma-
tional for Africa, we are not wallow-
ing in hyperbole; we are describing
the underlying thinking and the true
potential of the AfCFTA project.
34% 39% 43% 41% 29% 34%
26% 24% 23% 23%
25% 23%
11% 12% 12% 12% 15% 20%
15% 13% 12% 12% 15% 12%
14% 12% 10% 11% 16% 11%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 2017 2018 2019 2020 2021
Figure 1: Composition of African
External Exports, 2016-2021
Other
All food items (SITC 0 + 1 + 22 + 4)
Ores and metals (SITC 27 + 28 + 68)
Manufactured goods (SITC 5 to 8 less 667 and 68)
Fuels (SITC 3)
46% 45% 46% 43% 44% 39%
20% 20% 18% 19% 22% 22%
19% 19% 22% 23% 17% 20%
8% 8% 6% 6% 10% 11%
7% 7% 9% 9% 8% 8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 2017 2018 2019 2020 2021
Figure 2: Composition of
Intra-African Exports, 2016-2021
Ores and metals (SITC 27 + 28 + 68)
Other
Fuels (SITC 3)
All food items (SITC 0 + 1 + 22 + 4)
Manufactured goods (SITC 5 to 8 less 667 and 68)
Source: UNCTADStat Database

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers25
18) So, can we say that the Agreement will help
diversify Africa’s export markets?
21 Data from UNCTADStat, Accessed September 2022
22 Data from UNCTADStat, Accessed September 2022
Yes. As shown earlier, Africa is overly
reliant on the export of primary com-
modities. Between 2019 and 2021,
primary commodities accounted for
approximately 76% of Africa’s glob-
al goods exports, on average. At the
national level the situation is even
more stark. For example, primary
commodities accounted for over 80
percent of total exports for 37 Af-
rican countries individually. In ten
of these countries this ratio was 97
percent or higher21
.
However, the makeup of intra-Afri-
can trade is more balanced. In 2021,
for example, mineral fuels account-
ed for only 21.5% of intra-African
exports and other crude minerals
accounted for only 6%. Combined,
manufactured goods and machinery
and transport equipment comprised
25% of intra-African exports. In-
tra-African exports were mainly driv-
en by the production of goods higher
along value chains like road vehicles
and transport equipment, for exam-
ple22
. Therefore, the AfCFTA prom-
ises to help Africa pivot away from
extractives and secure sustainable
and inclusive development, leading
to more stable foreign exchange rev-
enues and increasing the variety of
goods in African markets.

26
Why do we need the AfCFTA? How can Africa benefit?
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Evolution in the level of Export Diversification Across World Regions
Africa America Asia Europe European Union
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Evolution in the Level of Export Diversification across African Regions
Northern Africa Eastern Africa Central Africa Southern Africa Western Africa
Note: Scores closer to 1 indicate higher levels of diversification whereby scores closer
to 0 indicate lower levels of diversification
Source: UNCTADStat Database

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers27
19) From a broader economic perspective, what can
the AfCFTA do for Africa?
23 United Nations. Economic Commission for Africa; United Nations. Economic Commission for Af-
rica (2021-07). New assessment of the economic impacts of the agreement establishing the African
continental free trade area on Africa: Policy Brief. Addis Ababa :. © UN. ECA,. https://hdl.handle.
net/10855/46750”
The AfCFTA is expected to be a
game-changer for Africa. ECA has
forecast the potential benefits the
Agreement can bring to Africa in
2045 versus the situation without the
agreement. Overall, ECA estimates
that the Agreement will increase Af-
rican GDP, trade, output and welfare
while also having positive impacts on
poverty and inequality.
While the Agreement is expected
to benefit Africa generally, since it
is an Agreement focused mainly on
intra-African trade the impacts here
are expected to be the greatest. As
discussed, compared to Africa’s
global exports, which are highly con-
centrated in extractives its internal
trade is much more balanced, which
gives the Continent a platform to
promote the kind of industry that
will help build resilience from exter-
nal shocks. ECA further estimates
that intra-African trade in agri-food,
services, and industry trade are ex-
pected to increase by 49.1, 37.9, and
35.7 percent, respectively in 2045
as compared to the situation with-
out the Agreement23
.

28
Why do we need the AfCFTA? How can Africa benefit?
20) Is it correct that the AfCFTA benefits the largest
African countries at the expense of the smallest ?
24 https://www.atlanticcouncil.org/blogs/africasource/who-are-the-winners-and-losers-of-africa-s-
new-free-trade-agreement/
25https://archive.uneca.org/sites/default/files/PublicationFiles/brief_assessment_of_afcfta_modali-
No, it is not. Differences in national
economies will portend differences
in gains from the Agreement. At the
national level Africa has a high level
of income disparity and every econ-
omy is different. Diversified econo-
mies such as Ethiopia, Rwanda, and
Côte d’Ivoire may see earlier bene-
fits from tariff liberalization. Over
the longer-term, industrialization
may benefit countries like South Af-
rica and Kenya more. Others that
are more resource dependent like
Chad, the Republic of Congo, and
Zambia may see fewer gains with-
out harnessing industrialization 24
.
So, while there is heterogeneity be-
tween countries, the AfCFTA holds
something for every country. ECA
estimates that with full liberaliza-
tion of tariffs, by 2040, exports to
Africa will be 23% higher for non-
LDCs, and 21% for LDCs, nearly
identical 25
. The key is for AfCFTA
A game changer for Africa's internal and external
trade relations
As intra-African trade would grow more than
Africa's trade with the rest of the world between
2020 and 2045, and following the successful
realization of the AfCFTA market, the share of formal
intra-African trade would expand substantially.
2020
2045
In 2020 In 2045 - With AfFTCAIn 2045 - Without AfFTCA
≈ $113 bnValue of
Intra-African trade + 405% + 577%
(compared to 2020) (compared to 2020)
Agri-food
Services
Industry
Energy/Mining
20.0%
2.6 %
15.5 %
2.9 %
17.2 %
3.0 %
32.6%
44.8 %
22.5%
59.1%
20.0%
59.8%
Source: ECA & CEPII/CIREM’s calculations based on MIRAGE-Power (January 2023)
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The AfCFTA will also contribute to reduce the current trade dependence of Africa on its external partners
Currently, around 85% of Africa’s formal
trade is with the rest of the world.
Africa’s imports from the rest of the world are mostly industrial goods (which
account for 60% of Africa’s total imports from the rest of the world).
≈ 14.2%Share of
Intra-African trade 37% increase compared to 2020 73% increase compared to 2020
Intra-African trade
The AfCFTA provides an unprecedented
opportunity for Africa's transformation,
competitiveness and development.
The increases in relative terms for
agrifood, industry and services will not
lead to equal increases in absolute terms,
because intra-African trade is currently
dominated by industry.
Effective implementation of the AfCFTA
would therefore not only boost
intra-African trade but also help Africa
industrialize and diversify away from
energy and mining.
≈ 19.4% ≈ 24.6%

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers29
State Parties to develop implemen-
tation strategies that focus on their
ties_eng_nov18.pdf
26 https://uneca.org/sites/default/files/keymessageanddocuments/en_afcfta-infographics-11.pdf
respective comparative advantages
for sustainable development.
21) At the sectoral level, where are the largest gains
expected?
As mentioned earlier, by sector the
largest gains are expected in the
agri-food, industry, and services
sectors. ECA estimates the follow-
ing products in these sub-sectors
will see the largest benefits26
:
a) In agri-food: Cereals and crops,
milk and dairy products, sugar,
and processed foods
b) In industry: Wood and paper,
chemicals, rubber, plastic, phar-
maceutical products, vehicles
and transport equipment, met-
als
c) In services: Tourism and Trans-
port
These sectoral gains are critical to
securing Africa’s long-term prosper-
ity. Even without the agreement, the
IMF projects that by 2025 six of the
top 10 fastest growing economies
globally are expected to be in Africa.
The AfCFTA serves as a platform to
accelerate Africa’s progress.

30
Why do we need the AfCFTA? How can Africa benefit?
22) Will the AfCFTA benefit Africa’s young people?
The Agreement Establishing the Af-
CFTA promotes inclusiveness and
broad-based socio-economic devel-
opment. Africa being the youngest
continent in the world, with 251 mil-
lion young people, the AfCFTA aims
to address key barriers that affect
the youth, such as unemployment,
overrepresentation in the informal
sectors, age discrimination, and lack-
ing in access to finance. The AfCFTA
will help mitigate these challenges
through, among other means:
1. Reducing costs of trade with
reduced tariffs and non-tariff
barriers incentivizing formaliza-
tion; and
2. Boosting trade, value addition,
and economic growth in sectors
where the youth are highly rep-
resented, such as in small-scale
agriculture, and the creative
and digital sectors.
The inclusion of a dedicated AfCFTA
Protocol on Women and Youth in
Trade is intended to pursue these
objectives and strengthen the posi-
tion of the African youth in intra-Af-
rica trade.
*Source: Assessment of the economic implications of the AfCFTA’s implementation carried
out by the United Nations Economic Commission for Africa (ECA) and the Centre for
International Research and Economic Modelling (CIREM) of the Centre d’Etudes Prospectives
et d’Information Internationales (CEPII), July 2021.
the agreed preferential terms.
The AfCFTA’s economic benefits are
largely centered on intra-African trade
The AfCFTA is expected to have positive
impact on Africa’s global GDP, trade, output
and welfare with benefits largely
concentrated in intra-African trade
Energy/Mining
Percentage change in intra-African trade, globally
and by main sectors with AfCFTA implemented in
2045 as compared to baseline (i.e. without AfCFTA)
19.4%
34.2%
Global variation
Intra-African trade creation
would also lead to an
improvement in Africa’s output.
49.1%
Agrifood
37.9%
Cereals and crops, milk and
dairy products, sugar,
processed food, rice, meat Tourism and transport
Refined oil,
mining
Wood and paper, chemicals,
rubber, plastic and
pharmaceutical products,
vehicles and transport
equipment, metals, textile,
apparel & leather products,
other manufactured
products
35.7%
At sub-sectoral level, the most notable increases in intra-African
trade, with positive output variations are to be found in:
Expected benefits in refined oil
need to be analyzed carefully, in
light of environmental concerns
associated with C02 emissions
from fossil fuels
(+US$ 43.3 billion) (+US$ 6.3 billion) (+US$ 120.4 billion)
(+US$ 24.8 billion)
(equivalent to a gain
of US$ 194.8 billion)
Services Industry

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers31
23) Will the AfCFTA benefit Africa’s women?
Yes, it will. To mention just two ex-
amples, women are estimated to
account for around 70 per cent of
informal cross-border traders in
Africa. Women also represent 58
per cent of all Micro, Small, and Me-
dium Enterprises (MSMEs) in Afri-
ca. When engaged in such activity,
women are particularly vulnerable
to harassment, violence, confisca-
tion of goods and even imprison-
ment. Additionally, research has
shown that many women-led firms,
especially MSMEs are less profit-
able than those owned by men. By
reducing tariffs and other barriers
to cross-border trade, the AfCFTA
reduces the perceived incentives
of informality, thereby encouraging
informal traders to operate through
formal channels that offer more pro-
tection. Overall, the contribution of
the AfCFTA to gender equality and
women economic empowerment
is expected to be significant. Once
again the decision to negotiate a
standalone AfCFTA Protocol on
Women and Youth in Trade, a first in
history, is indicative of the determi-
nation to achieve this goal.
24) What will the AfCFTA do for Africa’s global voice?
The world sees Africa as scores of
small and fragmented units with lit-
tle to no voice and engages with it
as such. This fragmentation limits
Africa’s ability to play a meaningful
role in making the rules that govern
global economic relations. Only by
forging a common position on im-
portant matters of common interest
can Africa become strong enough
at the negotiating table to write its
interests into the global rules of en-
gagement. Using the language of the
AU Agenda 2063, Africa can achieve
more only if it can “speak with one
voice and act collectively to promote
our common interests and positions
in the international arena”. Indeed,
only in this manner can Africa ensure
the unity and solidarity necessary to
withstand the continued external in-
terference in its affairs. With a sin-
gle voice, Africa can negotiate better
trade deals than what each of the 55
AU member States have been able
to achieve individually.

32
Why do we need the AfCFTA? How can Africa benefit?
By serving as a tool to integrate Af-
rica’s small and fragmented econo-
mies into a large single market, the
AfCFTA will provide the platform
for Africa to negotiate trading ar-
rangements with external partners
on terms that are more favorable to
it than has been the case hitherto.
Recently, the United States, the Eu-
ropean Union, Japan, China, India,
and several other economies have
indicated their desire to strength-
en trade relations with Africa. The
negotiations that are likely to fol-
low these engagements must be
handled from a position of strength.
Speaking with one voice will help
make the African voice louder, bold-
er, and stronger on the global stage.
The AfCFTA provides the platform
for this to happen.
25) What does the AfCFTA mean for climate change
and the environment?
The International Panel on Climate
Change (IPCC) put it well when it
said:
“Africa has contributed among
the least to greenhouse gas
emissions, yet key development
sectors have already experi-
enced widespread loss and dam-
age attributable to anthropo-
genic climate change, including
biodiversity loss, water short-
ages, reduced food production,
loss of lives and reduced eco-
nomic growth” (IPCC, 2022)
In other words, Africa contributed
the least to causing climate change
but suffers the most from it. While
increased trade under the AfCFTA
is expected to support the Conti-
nent’s industrialization and broad-
based development, more trade
may also raise concerns about its
impact on the climate. For example,
increased economic activity often
translates into increased demand
for transportation of goods, which in
turn requires additional investment
in trucking and transport infrastruc-
ture, like roads and bridges. This
would also mean increased move-
ment of people across borders. It is
thus natural that questions about
the impact of the AfCFTA on climate
change are being raised.

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers33
The fact that Africa has hardly con-
tributed to climate change does
not mean Africa should ignore this
existential challenge. In this con-
text, the AfCFTA can be a tool for
reducing emissions as it can poten-
tially increase the availability and af-
fordability of environmental goods,
services, and technologies. At the
same time, neither should Africa’s
efforts to bring about development
through the AfCFTA be undermined
by climate change considerations.
Climate justice demands that the
principle of common but differenti-
ated responsibilities is operational-
ized to the letter and spirit.
The AfCFTA and African Businesses
26) How does the AfCFTA benefit the African
private sector?
The AfCFTA is essentially about
creating a conducive working en-
vironment for the African private
sector by reducing barriers to trade,
harmonizing national policies and
regulations across the Continent,
and by reducing transaction costs
more generally. For example, as
indicated earlier, the AfCFTA will
eliminate tariffs on 97 percent of
goods traded between State Parties
to the Agreement over a period of
13 years. When that happens, the
African business sector will reap
the benefits in the form of not only
a larger market to export to but also
cost savings and associated compet-
itive advantages in that market.

34
The AfCFTA and African Businesses
27) What about Non-Tariff Barriers (NTBs)? Will the
AfCFTA address these?
NTBs, i.e. all barriers to trade that
take a form other than tariffs or cus-
toms duties, pose a major challenge
to cross-border trade on the Con-
tinent. Some examples of NTBs are
discretionary import licensing pro-
cedures, technical and health-re-
lated standards, and quantitative
restrictions which can include out-
right bans against the importation
of products from particular coun-
tries. Tackling these pervasive and
damaging instruments is therefore
paramount to a successful trading
arrangement. And the principle
in the AfCFTA Agreement is very
clear: they are prohibited.
But, in practice, we need to do a lot
more than make a blanket state-
ment such as this. The principal tool
with which the AfCFTA address-
es NTBs is through the Continen-
tal Non-Tariff Barrier Mechanism
(the NTB Mechanism), available at
https://tradebarriers.africa/home.
The NTB Mechanism enables busi-
nesses and traders to submit their
NTB-related complaints, which
will then be forwarded to nomi-
nated focal points in the countries
against which the complaints are
lodged for follow up and necessary
intervention. The tool is currently
operational, but widespread use of
the tool has yet to materialize since
meaningful trade under the AfCFTA
is only just starting. As of January
2023, only a handful of claims, six
to be exact, have been registered.
It is expected that as preferential
trade flows under the terms of the
AfCFTA increase, so will usage of
the tool.

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers35
28) What else does the agreement do for Africa’s cross-
border traders?
27 Data from UNCTADStat, Accessed September 2022
28 https://www.afdb.org/en/documents/african-economic-outlook-2022
Overall, the AfCFTA should be rec-
ognized as a bundle of binding and
reciprocal commitments exchanged
amongst State Parties whose pri-
mary objective is to reduce tariffs,
harmonize regulatory standards,
and create a conducive regulatory
environment for cross-border trade
in Africa. The AfCFTA is, first and
foremost, a critical instrument for
businesses because it aims to facil-
itate production and trade within
Africa. The Agreement is about
making Africa an attractive place
for businesspeople to invest in and
creating an environment that is con-
ducive both to themselves and to
all Africans collectively. It contains
multiple commitments on customs
cooperation and mutual adminis-
trative assistance, trade facilitation,
technical barriers to trade, sanitary
and phytosanitary standards, tran-
sit trade, and so on. Working ‘behind
the scenes’, these commitments will
reduce, if not eliminate, unneces-
sary barriers to trade. In this sense,
the AfCFTA is a powerful tool for
Africa’s private sector. That is why
the private sector must invest itself
in the AfCFTA, understand it, own it,
champion it, and hold governments
accountable to its promises and
commitments.
29) Much of the Agreement seems to be focused on
trade in goods. What about services?
Services are becoming an increas-
ingly important part of the African
economy. As of 2020, services ac-
counted for approximately 53% of
Africa’s GDP 27 and, in 2021, 63.6%
of Africa’s GDP growth was at-
tributed to the services sector 28
. As
services become more important
in Africa’s economy so do oppor-
tunities to trade in them. Trade in
services covers a wide range of eco-
nomic activities. Services trade can
happen without many of us noticing
it, such as when we make interna-

36
The AfCFTA and African Businesses
tional telephone calls or transfer
money to a bank account in anoth-
er country. Trade in services also
includes things like medical treat-
ment one receives abroad or study-
ing or teaching in another country.
Although they can initially sound
abstract, the sweeping scope of ser-
vices trade makes it apparent that
they are impossible to ignore even if
we may not be always aware that we
are engaging in them.
Just as the AfCFTA attempts to fa-
cilitate cross-border trade in goods,
it also aims to facilitate trade in ser-
vices amongst African countries.
The Agreement has a protocol ded-
icated entirely to services. Services
are formally classified into 12 sec-
29 https://www.wto.org/english/tratop_e/serv_e/serv_sectors_e.htm
tors for trade purposes: business
and professional services, commu-
nication, construction and related
services, distribution, education,
energy, environmental, financial,
health and social, tourism, transport,
and those not included elsewhere29
.
For now, AfCFTA State Parties have
identified five services sectors for
immediate liberalization: business
or professional services, communi-
cation services, financial services,
tourism & travel services, and trans-
port services. On each of these sec-
tors, AfCFTA State Parties are now
finalizing their schedules of specific
commitments, potentially launching
a services version of the equivalent
of the AfCFTA-Guided Trade Initia-
tive in the near future.

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers37
Business &
Professional
Communication
Construction &
Related
Distribution
Education
Energy
Environmental
Financial
Health and
Social
Tourism
Transport
Other
12 Service Sectors

38
The AfCFTA and African Businesses
30) The AfCFTA is about intra-African trade; is there
space for international investors?
30 Data from World Bank Databank, Accessed September 2022
31 UNSD 2019, available at unstats.un.org/, and UNCTADStat, available at unctadstat.unctad.org
32 https://centurionlg.com/2022/01/26/the-e-commerce-protocol-of-the-afcfta-possible-consider-
ations/
Yes. While the trade case for the Af-
CFTA is compelling, the case for in-
vestment is equally so. The AfCFTA
promises to integrate over 50 small
and fragmented markets into one
single market of 1.4 billion people
and a combined GDP of USD 2.4
trillion 30
. The AfCFTA then provides
any investor, African or otherwise,
with the economies of scale neces-
sary to justify investments of any
size. It does this by giving investors
the certainty that once a product
is produced in Africa, it will meet
the AfCFTA rules of origin require-
ments and benefit from free circu-
lation across the continent without
impediments.
When the AfCFTA is in full force
Africa’s historical experiences with
under-investment must change. To-
day, despite being home to almost
17 percent of the global population,
Africa accounts for just 3.9 percent
of world investment stock (2020) 31
.
The AfCFTA makes Africa ripe for
international and intra-African in-
vestment and provides an opening
for investors to engage with it in
ways never before possible.
31) What about digitalization? Does the AfCFTA
help bring Africa forward into the fourth industrial
revolution?
Yes. In February 2020 an offi-
cial decision was made to include
e-commerce in a third phase of
negotiations, to be known as the
Protocol on Digital Trade. This pro-
tocol was subsequently moved into
the current Phase II negotiations 32 .
Negotiations towards this protocol
are widely expected to be conclud-
ed in 2023.

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers39
E-commerce is seen as a valuable
platform that can help Africa take
advantage of the fourth industrial
revolution, which is bringing a fun-
damental change in the way we live,
work, and relate to one another. The
Fourth Industrial Revolution is en-
abled by extraordinary technological
advances commensurate with the
first, second and third industrial rev-
olutions.33 Digitalization also proved
to be a key lifeline for many business-
es, including Mirco, Small, and Me-
dium Enterprises (MSMEs), many
33 https://www.weforum.org/focus/fourth-industrial-revolution
of which are owned by Women,
during the Covid pandemic. In fact,
ECA research revealed that during
the pandemic nearly 65% of African
businesses took at least one step
toward advancing their digital activ-
ities. To adapt to the pandemic firms
cited acquiring new digital technolo-
gies and tools, training staff on digital
platforms, advertising digitally, and
developing new products more appli-
cable for online sales. ECA also found
African firms were able to reach new
customers and stay connected with
69%
54%
33%
22%
14%
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Acqui red Adequate
Technologies or tool s
Trained existing
employees/staff
Conducted Advertising
Campaign
Developed new line
of online products
Hired new employees
for Digitalization
Figure 3.6: Digitalzation Efforts by African Firms Since Covid-19, %
Source: ECA & IEC (2021). Reactions and Outlook to COVID-19 in Southern Africa. IEC: Mauritius & ECA: Addis Ababa. April 2021

40
Challenges with implementing the AfCFTA
existing ones when in-person inter-
action was limited34
.
Ongoing negotiations strive to de-
sign a protocol that takes into con-
sideration the importance of digita-
34https://www.uneca.org/sites/default/files/uploaded-documents/ATPC/reactions-and-outlook-to-
covid-19/COVID-19_Africa-Impact-Survey_March2021_Final_English_Release_22042021.pdf
35 https://au.int/sites/default/files/documents/38507-doc-dts-english.pdf
lization in the 21st century and is
in line with other continental initia-
tives such as the AU digital Trans-
formation Strategy for Africa which
seeks to build a Digital Single Mar-
ket in Africa by 2030 35
.
Challenges with implementing the AfCFTA
32) What are the challenges that African governments,
businesses, and consumers need to be aware of and
prepare themselves for?
The greatest threat to the AfCFTA
is incomplete or inadequate imple-
mentation. Like every initiative and
inter-governmental agreement, the
AfCFTA will make a difference in
the lives of African citizens only to
the extent its promises and com-
mitments are implemented. Gov-
ernments have shown leadership by
conceiving and initiating the AfCFTA
process and by bringing it to its cur-
rent stage, which should be recog-
nized and applauded. But this is not
enough; implementation is critical.
The AfCFTA is a development in-
strument for Africa, but it can deliver
on its developmental promises only
if and to the extent it is implemented.
The burden of implementation lies
primarily with the governments of
the State Parties, but African cit-
izens and businesses also have a
significant role to play. Both need
to support their governments and,
from time to time, hold them ac-
countable for the promises they
solemnly made in the Continental
treaties they signed and the nation-
al legislations they adopted. Good
pressure is good politics, and good
politics is good economics.

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers41
Equally serious threats to the Af-
CFTA may also come from outside
Africa. Agreements governing trade
relations between individual African
countries and/or subregions with
non-African trading partners – such
as the economic partnership agree-
ments (EPAs) with the European
Union (EU) – have the potential to
make AfCFTA implementation un-
duly political and costly.
33) What are the internal roadblocks, if any, that stand
in the way of fully implementing the Agreement?
As reiterated, implementation is
critical; nothing happens without it.
But, even with the best of efforts to
implement the Agreement, there
are still other hurdles that will face
any government, business or person
in this field:
a) Supply Capacity: Before talking
about trade, Africa needs to
have the products and services
to trade. That means production
capacity. That further means ca-
pacity to produce agricultural
and industrial products of the
right quality and quantity at
competitive prices. It also means
having the capacity to produce
and provide the range and quali-
ty of services consumers need at
competitive prices. Trade there-
fore presupposes investment
in building Africa’s productive
capacity, which translates into
investment in industrialization,
in education, in research and
development, and associated
endeavors. That is why the AU
has come up with an Action Plan
for the accelerated industrial de-
velopment of Africa (AIDA) and
another on an Agribusiness and
Agro-business Development Ini-
tiative (3ADI).
b) Hard Infrastructure: Both pro-
duction and trade across bor-
ders, physically or electronically,
require the right type and qual-
ity of infrastructure and logis-
tics, hard and soft. Economic
development is an infrastruc-
ture-heavy business. Without
roads and trucks, railway lines
and rolling stock, seaports and
seafaring vessels, airports and

42
Challenges with implementing the AfCFTA
aircrafts, no product can move
from one country to another
in meaningful quantities. Like-
wise, without digital connectiv-
ity networks in place, none of
the enormous promise of digital
trade can be realized. That is
why the AU’s Boosting Intra-Af-
rica Trade (BIAT) initiative of
2012 recognized that, for trade
liberalization to work, it needed
to be supported by a dedicated
Programme for Infrastructural
Development in Africa (PIDA)
that had been launched in 2010
with a view to bringing together
various regional and continental
infrastructures under the lead-
ership of the African Develop-
ment Bank.
c) Governance and soft infrastruc-
ture: Equally important, none of
these initiatives would exist or
function in the absence of insti-
tutions in the sense of organiza-
tions guided by a set of rules and
norms of good governance, rule
of law, accountability, and access
to fair, speedy, and impartial jus-
tice. That is why, back in 2003, the
AU created the African Peer Re-
view Mechanism (APRM) as the
Continent’s governance self-as-
sessment device. There are also
several initiatives and institutions
that form part of the African Gov-
ernance Architecture (AGA) that
complement the APRM.
d) Trade finance: Many good and
potentially viable business ideas
and startups remain unrealized
for lack of finance. Cross-border
trade is inherently more risky
than domestic trade. In cross-bor-
der trade, the parties reside in
different jurisdictions, are sub-
ject to different laws, transact
in different currencies, speak
different languages, practice dif-
ferent cultural traditions, etc.,
all of which translate into added
risks and transaction costs. Trade
finance instruments come in to
manage such risks and, in doing
so, to expedite business across
borders. Trade finance is at its in-
fancy in Africa and governments
would do well to prioritize the de-
velopment of such facilities. We
need more of it at continental, re-
gional, national, and local levels.
The commitment contained in
the BIAT initiative to “accelerate
the establishment of the African
Investment Bank” was a step in
the right direction, but it has yet

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers43
to be implemented. Afreximbank
is undertaking a lot of promising
initiatives in this area; it must
be supported. Afreximbank has
several programs like structured
trade finance, a note purchase
program, and asset-backed lend-
ing that can provide a critical
support function for countries
engaging in trade. Increasing en-
gagement with these institutions
can help build confidence and de-
risk cross-border African trade.
e) Trade facilitation: Whatever
the commitments undertaken
at Continental level to liberal-
ize and expedite cross-border
trade, the practice on the ground
in many countries remains chal-
lenging and at odds with those
commitments. Yet again, that
was why the BIAT initiative ded-
icated a section to trade facilita-
tion urging AU member states
to take measures at the “highest
levels of Government … in order
to facilitate the removal of illegal
roadblocks, check points and il-
legal fees and other rent seeking
practices along trade and transit
corridors and border crossings.”
Likewise, that is also why the Af-
CFTA Agreement has a separate
instrument, Annex 4, dedicated
to Trade Facilitation.
f) Trade information: The busi-
ness community in Africa lacks
adequate information on trade
and market opportunities in fel-
low African countries and mar-
kets. Market surveys are rarely
conducted; information about
customs regulations and pro-
cedures are often inaccessible,
and the cost of doing business
between African countries is dis-
proportionately high as a result.
Africa must address this critical
gap. The intra-Africa trade fair
that is being organized on a bian-
nual basis is a good initiative, but
it is far from enough.
g) Currency convertibility: Nearly
each of the small and fragment-
ed markets in Africa today is
served by its own national cur-
rency, making up a total of some
42 different currencies on the
Continent. To transact business
between two countries that have
different currencies, the use of
a third country’s legal tender,
often the Euro or the USD, be-
comes necessary. The moment
transactions between two trad-

44
Challenges with implementing the AfCFTA
ers sitting on either side of an
African border are subjected to
a third currency as an interme-
diary, transaction cost shoots up.
Africa is estimated to lose up to
USD 5 billion every year on cur-
rency conversion alone. The final
solution for this can come only
from a monetary union, which
is further down the road on the
African integration journey. In
the interim, Africa has launched
the Pan-African Payment and
36
https://papss.com
Settlement System (PAPSS), “a
cross-border, financial market
infrastructure enabling payment
transactions across Africa”. Uti-
lizing cutting-edge technolo-
gy connecting African banks,
payment service providers and
other financial market interme-
diaries, PAPSS enables instant
and secure payments between
African countries while trading
under the AfCFTA. 36
34) What does the AfCFTA bring to the ordinary African
citizen
The AfCFTA brings significant ben-
efits to the African citizen in several
ways.
To begin with, the AfCFTA is expect-
ed to reduce poverty across Africa.
While the magnitude of poverty
reductions depends on each coun-
try’s existing socio-economic situa-
tion, modelling work carried out by
ECA predicts that all countries will
see improvements to welfare and
living standards. For example, ECA
estimates that, by 2045, with full Af-
CFTA implementation, the number
of people living under extreme pov-
erty (less than USD 1.9/day/person)
will be reduced by over 19% in Cote
d’Ivoire, 11.5% in Tanzania and 3.2%
in Ethiopia as compared to the si-
tu-ation without the AfCFTA.
But, in addition to the benefits of the
Agreement at a high level, there are
several specific pathways through
which African citizens can benefit
from the AfCFTA.

The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers45
First, African citizens benefit in
their role as businesspersons. As
discussed earlier in response to
Question #26 on the role of the
AfCFTA for the African private sec-
tor, the AfCFTA is essentially about
progressively creating a large single
market in which African businesses
can produce and trade freely. To the
extent the AfCFTA benefits African
businesses, the African citizen bene-
fits in his or her capacity as the own-
er or operator of these busi-nesses.
Second, in their role as workers
Af-rican citizens will also benefit
from the AfCFTA. Research shows
that a business environment that
sup-ports entrepreneurship cre-
ates more jobs, especially through
the ability of businesses to bring
innovation and investment , while
more open economies create bet-
ter paying jobs than those that are
more closed off.
Finally, African citizens benefit
from the AfCFTA in their role as
consum-ers since, in the end, every
one of us is a consumer. When the
AfCFTA forces national markets
to open themselves to competition
from other countries, more products
and services will compete for con-
sum-ers. Competition is always good
for consumers because it creates
more choice, brings better prod-
ucts and services to the market, and
tends to make these products and
services available at lower prices.
In summary, the AfCFTA is good for
business, but it is also good for the
ordinary citizen in her capacity as a
consumer, worker, and entrepreneur.

Timeline & Milestones of the AfCFTA
June
2015
May
2016
May
2019
Jan.
2021
July
2022
Feb.
2023
Feb.
2016
Feb.-July
2017
March
2018
Feb.
2020
Oct.
2022
Negotiations
Begin
First AfCFTA Negotiating
Forum held
Agreement & Adoption of
12 Negotiating Guiding
Principles
Negotiations &
Agreement on 90% Tariff
Liberalization
Phase I Negotiations
Concludes
Decision taken to add
Protocol on Women and
Youth in Trade & Protocol
on Digital Trade
AfCFTA Guided Trade
Initiative Officially
Launched
AfCFTA Enters
into Force
Trading formally
begins
AfCFTA Guided Trade
Initiative Announced
AU Assembly adopts
three protocols:
Competition, Intellectual
Property and Investment

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The AfCFTA – What You Need to Know: Frequently Asked Questions & Answers