The AfCFTA one year down the line: Reviewing progress

The African Continental Free Trade Area (AfCFTA) officially commenced trading in January 2021, marking a significant step towards economic integration and growth across the continent. One year down the line, we take a look at the achievements and challenges faced by African countries in implementing this landmark agreement. In a recent interview with CNBC Africa, Habiba Ben Barka, the Chief of Africa Section in the Division of Africa and the Least Developed Countries at UNCTAD, shared insights on the progress made and the road ahead for the AfCFTA. One of the key achievements highlighted by Barka is the number of countries that have ratified the agreement. Out of the 54 African countries that have signed the agreement establishing the AfCFTA, 39 have deposited their instruments of ratification with the African Union Commission. Additionally, countries have made significant progress in tariff line and rules of origin negotiations, agreeing to liberalize 90% of tariff lines by 2025, which could boost African export potential by billions of dollars. However, despite these accomplishments, several challenges still need to be addressed to ensure the success of the AfCFTA. Barka emphasized the need to enhance productive capacity and infrastructure to meet the demands of the regional market. Issues such as access to finance, energy, trading infrastructure, and trade information must be resolved to unlock the full benefits of the free trade area. Another critical challenge highlighted by Barka is the need for a liberal mobility framework to facilitate the movement of people between countries. Seamless mobility can promote regional clustering of export and import industries, contributing to the success of the AfCFTA. Institutional capacity building and strengthening are also essential to support the negotiation of remaining protocols within the agreement. In terms of future negotiations, Barka mentioned areas such as competition policy, intellectual property rights, e-commerce, and investment protocols. Progress in these areas, along with the launch of the Pan-African payment and settlement system, is expected to further streamline trade operations within the AfCFTA. The payment system is set to significantly impact trading by enabling easy transactions in local currencies, eliminating the need to access foreign currencies for trade. Looking ahead to 2022, Barka anticipates continued progress in negotiation protocols, adoption of certificates of origin, and increased awareness and collaboration among African countries and development partners. The focus will be on strengthening national capacities, enhancing e-commerce participation, and realizing the potential benefits of the AfCFTA for African businesses. Regarding the impact of COVID-19 on the AfCFTA, Barka expressed confidence in the resilience of African countries and institutions. The pandemic has accelerated the digitalization of production processes and highlighted the importance of sectors with technological needs. While new variants pose risks, African countries are leveraging digitalization to adapt and build resilience in intra-African trade. In conclusion, the AfCFTA continues to hold promise for economic transformation and integration across the continent. With concerted efforts to address challenges and leverage opportunities, African countries are poised to reap the benefits of this historic free trade area, driving growth and prosperity for the region.