In Kigali, Rwanda, where the framework protocol was signed in March last year, African heads of state and government were optimistic. If – or when – the 55 African countries ratify the free trade area, it would together represent more than $4 trillion in consumer and business spending, and a market size of 1.2 billion people. „This is essential, because services account for about 60% of Africa`s GDP and, for example, in 2014, services accounted for 30% of world trade…. Markets for national services will be open to service providers from other African countries,” Muchanga said. The implementation of afCFTA, although delayed by the COVID 19 pandemic, is expected to resume in January 2021, with the initial focus on facilitating trade for small and medium-sized enterprises, which account for 90% of the jobs created on the continent. But the world that AfCFTA will address in January will be very different from the world in which it was conceived. There are more challenges than ever before, thanks in part to the economic destruction of the pandemic – „an unprecedented health and economic crisis,” said the International Monetary Fund, „which threatens to take the region off, reverses the progress of recent years and slows the region`s growth prospects in the years to come.” Trudi Hartzenberg, executive director of the Trade Law Centre, a South African-based think tank, told Africa Renewal that while the free trade area could significantly improve competitiveness and promote intra-African trade, it also requires „strong technical leadership and capacity to help member states in future negotiations…. We are also witnessing strong protective currents in the global economy. He called on Member States that have not yet committed to full membership to present their timetables for specific service delivery commitments, in accordance with agreed terms. In March 2018, three separate agreements were signed at the 10th African Union extraordinary meeting on AfCFTA: the African Continental Free Trade Agreement, the Kigali Declaration; and the protocol on the free movement of people. The Protocol on the Free Movement of Persons aims to create a visa-free zone within AfCFTA countries and to support the creation of the African Union passport. [27] At the Kigali Summit on 21 March 2018, 44 countries signed the AfCFTA, 47 signed the Kigali Declaration and 30 signed the protocol on the free movement of persons.
Although a success, there were two remarkable holdouts: Nigeria and South Africa, the two largest economies in Africa. [28] [29] [30] Businesses frustrated by trade barriers could use a „non-tariff barrier mechanism” in the agreement to report and demand solutions to trade problems, Muchanga says. Eritrea has not signed because of tensions with Ethiopia, but after the 2018 Eritrea-Ethiopia summit, the AU Commissioner for Trade and Industry expects Eritrea to sign the agreement. [93] A second challenge is the East African Community. Of the six members, only three have ratified the AfCFTA. Given that the regional bloc of the EAC is a customs union and therefore has a common external customs duty (CET), without further ratification of afCFTA by the other three Member States, the integrity of the CET will be problematic. In principle, rules of origin may limit this problem, but their liberal application will increase bureaucratic overheads and increase the risk of trade diversion (trade being diverted from a more efficient exporter to a less efficient exporter because of the different tariffs applied).