AfCFTA one year on: The African Continental Free Trade Area (AfCFTA) celebrated its first anniversary on January 1, 2022.
With exception of Eritrea, all African countries are signatories to the agreement.
Over time, ratifying counties pledge to eliminate import tariffs on 90% of goods traded between African states. Many hope this will increase trade between African countries, which will in turn boost manufacturing and create jobs, bringing more prosperity and social equality to those on the continent.
African nations currently trade more internationally than with each other. Intra African trade accounts for 17% of African exports, which is low compared to 59% for Asia and 68% for Europe, according to the World Economic Forum.
But AfCFTA wants to do more than just boost trade in goods — its scope includes services, investment, intellectual property rights and competition policy, although these aspects are still under negotiation. The continental body aims to achieve these dreams by 2064.
But since Africa officially started trading under AfCFTA in January 2021, the practical impacts of the agreement have been minimal, said Matthias Boddenberg, head of the German Chamber of Commerce and Industry for Southern Africa.
Disruptions of global supply chains due to coronavirus restrictions in 2020 limited AfCFTA’s potential, Boddenberg said.
“Manufacturers in neighboring Botswana couldn’t supply wiring harnesses for the auto industry in SouthAfrica because borders were closed,” he said, giving an example.
Tanzanian economist Gabriel Mwang’omda, however, believes the free trade area is a learning curve for the continent. He argued that Africa’s vastness makes it impossible for AfCFTA to be fruitful within a year.