This archive report was first published on 10 September 2019.
On July 7, 2019, the African Continental Free Trade Area (AfCFTA) officially came into operation at the 12th Extraordinary Summit of the African Union in Niamey, Niger. This flagship project of the AU's Agenda 2063 has the potential to make the continent the single largest market, covering 55 countries, 1.5 billion people, and a GDP of $2.5 trillion.
According to the Brookings Institute, intra-regional trade accounts for 17% of exports in Africa, compared to 59% in Asia and 69% in Europe. The AU aims to increase intra-regional trade to 50% of the continent's trade by 2050.
The implementation of AfCFTA will be done in phases. Phase 1 will cover trade in goods and services, tariff liberalization, and non-tariff and dispute settlement. Phase 2 will cover aspects such as competition policy, intellectual property rights, investments, and movement of business persons across borders.
However, the implementation of the protocols for free movement of people will be challenging, with concerns such as security, local labor market needs, socioeconomic disparities, and fear of health epidemics. To overcome these challenges, leaders must be accommodating, mindful, and pragmatic.
As mobility of people is critical for attaining the vision, countries must ensure that the pact covers the rendering of critical services and aspects of immigration. This includes banking, tourism, finance, and information communication services.
The AU Protocol on Movement of People is being ratified, with Rwanda and Ghana already implementing visa on arrival with good results. This is a cost-effective option that works efficiently and effectively while protecting national security.
Additionally, specific options should be developed to cater for activities that require skills not available locally. This may include Short Term Work Permit, which has been developed by countries like Nigeria, South Africa, Mozambique, and Ghana.
For AfCFTA to have the intended impact, rules on mobility of services need to be harmonized, and political will is needed to ensure easier mobility of skilled people through the introduction of new technology.
