Bigger is better, size is everything; Merits of the African Continental Free Trade Area - Peter Dadzie

Trade has been the motor of economic, social and political integration of African countries for many centuries prior to the establishment of the Organization of African Unity (OAU) in 1963. In 1980, the OAU adopted the Lagos Plan of Action for the Economic Development of Africa 1980-2000, articulating a regional development plan for Africa that included the formation of an African Common Market. However the level and rate of implementation of trade integration programmes of many regional economic communities (RECs) faltered.

With a view to reviving and launching the continental integration project, the OAU Abuja Treaty Establishing the African Economic Community was adopted in June 1991. It articulated the formation of a continental free trade area as a stepping stone toward the realisation of the African Economic Community. Momentum towards implementing this objective gathered speed with the formation of the African Union (AU) in 2002, replacing the OAU.

At the 2012 AU Summit, Heads of State and Government adopted a Decision on the Establishment of a Continental Free Trade Area (AfCFTA) by the indicative date of 2017 and endorsed the Action Plan on Boosting Intra-Africa Trade (BIAT) which identifies seven areas of cooperation namely trade policy, trade facilitation, productive capacity, trade related infrastructure, trade finance, trade information, and factor market integration.

The African Continental Free Trade Area (AfCFTA) is a decision of the Assembly of Heads of African States and Governments to boost Intra-Africa Trade by integrating Africa’s markets with the free movement of persons, capital, goods and services. The initiative presents major opportunities and challenges to boost intra-African trade which Africa is missing.

The principal objective of the Protocol is to create a liberalized market for trade in goods between State Parties with progressive elimination of tariffs and non-tariffs barriers, enhanced efficiency of customs procedures, trade facilitation and transit, enhanced cooperation in the areas of technical barriers to trade and sanitary and phytosanitary measures, development and promotion of regional and continental value chains and enhanced socio-economic development, diversification and industrialization across Africa as the specific objectives.

To achieve the objectives of the AfCFTA, State Parties are to among other things eliminate tariffs, liberalize trade in service, cooperate on investment, intellectual property rights and competition policy, and cooperate on all trade related areas and customs matters. The Agreement will cover trade in goods and services, investment, intellectual property rights and competition policy.

The Agreement is slated to enter into force thirty days after twenty two (22) countries have deposited their instrument of ratification at the Depository of the African Union. Eighteen ratifications have been recorded so far including Chad, Congo, Ghana, Kenya, Rwanda, South Africa, etc.

The AfCFTA when fully operationalized will boost trade, uplift welfare, foster a vibrant and resilient African economic space, promote economic diversification, structurally transform Africa, and bring about technological development and enhancement of human capital. It also has the potency to foster peace, security and political stability in Africa.

The AfCFTA will create a bigger and a better market size and in the words of Adam Smith “improve the productive powers of labour, increase real revenues and wealth” of Africa.





Dadzie Peter

Teaching Assistant – KNUST

Research Fellow – ILAPI


Source: ILAPI