Analysis of the African Continental Free Trade Agreement (AfCFTA):The Pros and Cons

Abstract

The concept of African Continental Free Trade Area(AfCFTA) was formed during the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union (AU) in January 2012, on the theme ‘Boosting Intra-African Trade’, which adopted the decision to establish a free trade area. An Extraordinary Summit of African leaders held on the (AfCFTA) from 17-21 March 2018 in Kigali, Rwanda, during which the agreement establishing the AfCFTA was pre-signed. The main objectives of the AfCFTA as conceptualized are to create a single continental market for goods and services, with free movement of business persons and investments. It aims to expand intra-African trade through better harmonization and coordination of trade liberalization and the facilitation and ease of instruments across Africa in general. The AfCFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.  The AfCFTA aims to bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, and a combined gross domestic product (GDP) of more than US$3.4 trillion. In terms of numbers of participating countries, the AfCFTA plans to be the world’s largest free trade area since the formation of the World Trade Organization. This paper examines the business environment of African Continental Free Trade Agreement and the consequent pros and cons that might arise as a result of the agreement.