AfCFTA Investment Protocol finally approved

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The Investment Protocol to the Agreement Establishing the African Continental Free Trade Area (AfCFTA) Agreement has finally been approved in Accra, Ghana, after one week of State-Party consultations. The AfCFTA Committee on Investment, the body established on 3rd May 2021 by the Ministers responsible for Trade of African States to drive the negotiations of such Protocol, met for the first time virtually from 6th to 9th September 2021 to agree on the modalities and principles for negotiating the AfCFTA Protocol on Investment. This was followed by a second meeting held from 13th to 16th December 2021 to analyse a “Zero Draft” version of the Protocol developed by the AfCFTA Secretariat.

The latest meeting of the AfCFTA Committee on Investment, the seventh, approved the final text of Protocol on 30 September 2022. The Investment Protocol aims to promote sustainable intra-African investments and bring more coherence to the investment governance landscape across the continent, characterized by the presence of a plethora of disjointed, in some cases contradictory and overlapping regulations adopted at both national and regional (by some Regional Economic Communities) level. The 9th ARIA (Assessing Regional Integration in Africa) report of the United Nations Economic Commission for Africa (UNECA), African Union (AU), African Development Bank (AfDB) and United Nations Conference on Trade and Development (UNCTAD), points out that African countries have currently 173 Bilateral Investment Treaties (BITs) in force among themselves. At the regional level, each of the 8 Regional Economic Communities (RECs) officially recognized by the African Union has also developed at least one instrument that relates directly or indirectly to investment.

In addition, the African Union concluded in 2016 a Pan-African Investment Code (PAIC) with the purpose to offer to its member States a guiding instrument and framework of cooperation to structure their BITs. Although article 3 of the PAIC envisages the possibility at paragraph 2 for the AU Member States to agree the transformation of the Code into a binding instrument which will replace all the intra-African BITs (or investment chapters in intra-African trade agreements), the 5th Meeting of the AfCFTA Negotiating Forum in March 2017 decided to develop a separate Investment Protocol to complement the AfCFTA Agreement, building on the PAIC.

The new AfCFTA Investment Protocol, whose final text is not yet publicly available, is expected to put order to such a fragmented landscape of investment instruments in Africa, in an attempt to achieve substantial certainty for investors through the harmonization of investment protection at the continental level.