AfCFTA Secretariat annual report on the acceleration of the AfCFTA available on-line

The African Continental Free Trade Area (AfCFTA) Secretariat has made available the annual Report of the Secretary General on the AU theme of the year 2023 “Accelerating the implementation of the African Continental Free Trade Area”. The report, covering the period from february 2023 to february 2024, provides an overview of the work of the Secretariat during the year under review. It opens with an introduction on the AfCFTA which describes the evolution of the Agreement and the status of trade under the AfCFTA, including the Guided Trade Initiative (GTI), the initiative that aims to test the operational, institutional, and legal environment of the AfCFTA by accompanying the State Parties to the agreement in the preferential exchange of a series of goods for which the relevant rules of origin have been agreed.

The report explains that the GTI entered in a second phase which will see the number of participating countries to expand significantly during 2024. An important achievement is the participation of South Africa in the initiative, one of the biggest African economies, that in the end of January sent two shipments of consolidated goods via maritime to Kenya and Ghana. The report continues by outlining all the activities that have been during 2023 under the Theme of the Year 2023 “Acceleration of AfCFTA implementation”, launched by the AU Assembly of Heads of States and Government with the Decision Assembly/AU/Dec.861(XXXVI) of 2023. A final Section contains recommendations and proposes follow up actions for the full realization of the AfCFTA.

The main points that need to be highlighted are the following:

To date, 47 out of 54 AfCFTA State Parties have ratified and submitted their instruments of ratification to the African Union Commission (AUC), with seven (7) countries expected to ratify the Agreement, namely: Benin, Liberia, Libya, Madagascar, Somalia, South Sudan, and Sudan. The number of adopted Provisional Schedules of Tariff Concessions for market access verified by the Secretariat and adopted by the AfCFTA Council of Ministers has risen to 45 (this number  includes the Provisional Schedules of Tariff Concessions submitted by Customs Unions that operate within the continent). On the other hand, in the area of Trade in Services, twenty-two (22) Schedules of Specific Commitment have been adopted covering five (5) priority sectors (i.e. Business, Communication, Financial, Tourism, and Transport Services), with other twenty-six (26) offers that are currently under review.

Regarding the Protocol negotiations, from February 2023 to February 2024, four (4) protocols have been concluded and approved: 1) the Protocol on Investment, 2) the Protocol on Intellectual Property Rights, 3) the Protocol on Competition Policies and the Protocol on Digital Trade (approved during the 37th AU summit held from 15th January to 18th February 2024 in Addis Ababa, Ethiopia) The Protocol on Women and Youth in Trade is in the final stages of consideration by the Member States.

From 16 to 18 April 2023, the AfCFTA Secretariat also organised the inaugural AfCFTA Business Forum, a platform for public-private engagements among businesses and governments that aims at exploring trade and investment opportunities under the AfCFTA among Africa’s business community. The forum also served as the launchpad for the HerAfCFTA movement, a movement that aims to escalate the participation of women in African trade, so to realize the potential of the AfCFTA. The first AfCFTA Business Forum, held in Cape Town, South Africa, has been rebranded “Biashara Africa” (a word that in Kiswahili means “business”) and will be replicated annually in other African countries. The next edition with be dedicated to the strengthening of value chains and supply chains systems for increased Intra-Africa Trade. In this regard, the report notes that the activities of the AfCFTA Secretariat during the review period were mainly focused on four (4) primary value chains considered highly strategic in Africa: 1) agro-processing, 2) automotive, 3) pharmaceuticals, and 4) transportation and logistics.

With regard to the transportation and logistics sector, an assessment was conducted on five major African trade corridors: 1) the Abidjan-Lagos corridor, 2) the Northern Corridor linking the port of Mombasa to Goma-Democratic Republic of Congo (DRC), 3) the Central Corridor linking Dar es Salaam to Kigali, Dar es Salaam and Bujumbura in the East African Community, 4) the North-South Corridor, which connects eight SADC countries, and 5) the Central Africa Corridor, connecting the port of Douala to Yaoundé, Libreville and Brazzaville. Such assessment allowed the identification of a series of trade facilitation challenges within such Corridors, including low interoperability between State Parties, low use of risk management, lack of IT equipment at border post, lack of harmonization of border crossing process, language barrier and low awareness of the AfCFTA Agreement. Based on the findings of such assessment, a series of meeting were organized to discuss solutions able to address these constraints. Among these, a draft technical specification for Electronic Certificate of Origin and a regulatory framework for transit bond were developed. With regard to the latter initiative, the report informs that the Secretariat is also working to the development of a single Bond Guarantee to facilitate the movement of goods in transit between countries, eliminating the need for multiple bonds which significantly increase expenses and delays. It is not clear what exactly this single bond system is, as no additional information is provided regarding such project, but most probably this is the Pan-African customs transit scheme developed by AfreximBank and piloted in the COMESA region.

Another aspect to highlight is that the Secretariat is working to the development of an AfCFTA Review Mechanism aimed at monitoring the respect by African States of their commitments under the AfCFTA. We analysed this WTO-inspired system here.

With regard to the recommendations, the report notes that as the AfCFTA has entered in its implementation phase, state parties will increasingly require technical assistance and capacity building interventions by the Secretariat. In particular, a mobilisation of resources for capacity building is key to ensure that no country is left behind. The AfCFTA Secretariat also aims to finalise its 10 years implementation Strategy (2024 – 2033) to identify and keep track of threats and opportunities relative to implementation of the AfCFTA.