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AfCFTA Guide
Trade in Goods
The African Continental Free Trade Area (AfCFTA) represents a historic milestone in Africa's aspirations towards achieving economic integration. With the ambitious objective of creating a single market for goods and services across the continent, the AfCFTA is expected to help unlock Africa's trade potential and encourage sustainable development for a prosperous future.
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The Protocol on Trade in Goods includes the gradual elimination of tariffs and non-tariff barriers, enhanced customs procedures, and cooperation on technical barriers to trade. By promoting regional and continental value chains, the Protocol strives to boost competitiveness, increase trade and investment opportunities, and create economies of scale for businesses across the State Parties.
The Protocol acknowledges the diverse levels of development among Member States and provides flexibility and special and differential treatment to Member States with special needs.
Liberalisation of Trade
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The provisions relating to the liberalisation of trade, contained in the Protocol on Trade in Goods, play a crucial role in ensuring the smooth flow of goods among Member States. It covers import and export duties, elimination of quantitative restrictions, tariff concessions, non-tariff barriers, and rules of origin. By understanding and implementing these provisions, State Parties can promote a more integrated, fair, and prosperous trading environment within the AfCFTA.
Elimination of Import Duties: Member States have committed to progressively eliminating import duties or charges with equivalent effects on goods originating from other Member States.
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An import duty is a fee or charge imposed on goods imported from one country to another. However, certain charges, including internal taxes on similar goods within the country, antidumping or countervailing duties, and duties related to safeguards, do not fall under the category of import duties.
Under the AfCFTA, the following modalities will apply to the elimination of import duties:
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Tariff lines will be phased out completely over a period of 10 years for LDCs and 5 years for non-LDCs for non-sensitive goods, representing 90% of tariff lines.
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All Members can retain tariffs for a period of 5 years on sensitive goods, representing 7% of tariff lines, with the phasing out of tariffs occurring as from the 6th year.
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All Members can exclude the remaining 3% of tariff lines from liberalisation, although this will be subject to review every five years.
Member States will apply preferential tariffs to imports from other Member States based on their Schedule of Tariff Concessions. As of February 2023, 46 Provisional Schedules of Tariff Concession have been submitted by member states, including the schedules from four Customs Unions, namely CEMAC, EAC, ECOWAS, and SACU.
To identify the tariffs applicable for any product being traded on the continent, the AfCFTA Secretariat has developed the AfCFTA e-Tariff Book.
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While its primary use is intended for Trade and Customs Authorities, the e-Tariff Book also serves as a valuable resource for the private sector, empowering traders with information and knowledge on tariffs, and commodity classification.
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The E-Tariff Book is accessible through this link: https://au-afcfta.org/etariff/
We have also developed an intuitive dashboard that allows users to easily view tariff offers made by different countries for different products. Access here.
Quantitative Restrictions: Quantitative Restrictions are not allowed under the AfCFTA.
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Quantitative restrictions are instruments that limit the quantity or volume of goods that can be imported or exported between countries. Some examples of quantitative restrictions include import and export quotas, embargoes, and import and export licences.
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While quantitative restrictions cannot be applied by members of the AfCFTA, there are some exceptional circumstances in which quantitative restrictions can be applied. This is in accordance with Article XI of GATT 1994. Some restrictions that can be maintained include:
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restrictions to safeguard the balance of payments;
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import or export restrictions made effective through State-trading operations;
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assistance for economic development through protective or other measures;
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safeguard actions; and
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security exceptions
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Export Duties: State Parties may regulate export duties but must apply them on a non-discriminatory basis for goods exported to all destinations.
Non Discrimination
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Non-discrimination is a key principle in free trade agreements (FTAs), including the AfCFTA. The aim is to foster equitable trade relations among Member States while promoting economic growth and cooperation.
Most-Favoured-Nation Treatment: According to Article 4 of the Protocol, Member States are required to accord Most-Favoured-Nation (MFN) treatment to each other. MFN treatment means that Member States must provide the same benefits and advantages to all other Parties without discrimination.
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Nonetheless, the AfCFTA still allows Member States to establish preferential trade arrangements with third parties, as long as such arrangements do not hinder the objectives of the Protocol. However, if any advantage or concession is granted to a third party, it must be extended on a reciprocal basis to all other Parties of the AfCFTA. However, this does not apply to any advantage or concession granted prior to the entry into force of the AfCFTA.
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Suppose Kenya grants a tariff reduction of 10% on a specific product to the European Union through an FTA. According to the MFN Treatment clause, Kenya must extend the same 10% tariff reduction to all other contracting Parties of the AfCFTA.
National Treatment: According to Article 5 of the Protocol, a Member State is obligated to treat products imported from other Member States no less favourably than domestic products, once the imported products have been cleared by customs. This treatment applies to all aspects affecting the sale and conditions for the sale of these products. In other words, State Parties must not discriminate against foreign products and must treat them on par with domestically produced goods in terms of market access and trading conditions. This ensures that imported products receive equal treatment as domestic products and promotes a level playing field.
Suppose Madagascar imposes certain sanitary requirements on domestically produced canned fish to ensure product safety. When importing the same canned fish from Mauritius, Madagascar must apply the same regulations to the imported goods after customs clearance.
Special and Differential Treatment: One of the core objectives of the AfCFTA is to ensure mutually beneficial trade. In order to achieve this objective, Member States are expected to provide flexibility to other Member States based on their different levels of economic development or individual specificities.
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These flexibilities may include special considerations and an additional transition period for the implementation of the Agreement, offered on a case-by-case basis. This provision acknowledges the diverse economic conditions among the participating countries and seeks to foster inclusive and sustainable trade within the AfCFTA. Special and Differential treatment allows countries to integrate into the AfCFTA at a suitable pace, fostering inclusive trade growth and facilitating economic development.
Suppose Rwanda, which is a less developed economy, faces challenges in implementing certain trade-related measures due to limited resources. South Africa, a more developed economy, offers technical assistance and additional transition periods to Rwanda for the gradual implementation of certain trade obligations.
Trade Remedies
Trade remedies can be applied by Member States under the AfCFTA, in order to protect certain industries and ensure fair competition. Trade remedies comprise actions taken in response to subsidies, imports at low and unfair values and import surges. If a Member State identifies a strategic industry facing any of these challenges, it can impose temporary protective measures, such as countervailing duties, anti-dumping measures, and safeguards. However, such measures must be applied fairly and for a reasonable time.
Moreover, the AfCFTA also includes measures aimed at protecting infant industries if countries consider them to have strategic importance for growth and development. However, before implementing any protective measures, the Member State must demonstrate that it has made reasonable efforts to overcome the challenges faced by these industries. Any measures being applied must not discriminate between countries and can only be applied for a specified period.
Non-Tariff Barriers
Non-tariff barriers (NTBs) refer to any measures, other than tariffs, that can act as a barrier to international trade between countries. These can include a range of measures such as government subsidies, customs procedures, and rules of origin, among others. For example, in Kenya, weighbridges are a common feature between the port of Mombasa and other border towns. Kenya imposes restrictions requiring that vehicles only carry the weight mentioned in their tare and gross weight specifications. Before crossing any weighbridges, vehicles are weighed and are either fined or need to pay charges in instances of overload. While such restrictions are crucial for ensuring road safety and the preservation of infrastructure, they also impact businesses, causing delays and representing a challenge to smooth trade flows.
NTBs under the AfCFTA have been classified into seven broad categories based on their nature.
NTBs can be more restrictive for trade than tariffs. They are estimated to have severe trade-dampening effects on imports. Inefficient customs and entry requirements increase compliance costs for businesses engaged in cross-border trade. In the context of the AfCFTA, the elimination of NTBs unlocks new trade opportunities by reducing the costs of trade. The creation of a common set of rules for participating countries in areas such as competition policy, health standards and technical barriers to trade increases cooperation and reduces grounds for overlapping of laws and regimes.
Further, the reduction of NTBs can boost the effectiveness of tariff liberalisation by raising consumption levels and income. UNCTAD estimates that a reduction in NTBs alone has the potential to bring in an estimated US $20 billion to the African economy as a whole. The IMF estimates that a 35% reduction in NTBs alone has the potential to increase welfare in Africa by 1.7% and when combined with tariff elimination it can bring in a 2.1% increase in welfare in Africa.
Reporting and Monitoring Tools: The AfCFTA adopts an institutionalised approach to reducing and monitoring the process of NTB reduction. Through a hierarchical system of committees, it can extend the participation of public and private stakeholders and capture their recommendations in the process of policy formulation.
At each National level, a National Monitoring Committee and National Focal points will be set up through which businesses can receive clear guidelines on monitoring and evaluation mechanisms. The National Focal points are the first point of contact through which businesses or economic operators can register a complaint or trade concern.
Businesses can report any obstacle encountered when trading goods across intra-African borders through an online platform developed by the AfCFTA. The website can be accessed here: https://www.tradebarriers.africa/
Soon, businesses will also have the option to report NTBs via SMS. The website is available in 4 different languages, namely Arabic, English, French, and Portuguese.
Sanitary and Phytosanitary Measures
SPS measures under the AfCFTA are based on the WTO Agreement on the Application of Sanitary and Phytosanitary Measures. The primary objective of these measures is to facilitate trade while ensuring the safety of human, animal or plant life and health. The AfCFTA ensures additional cooperation in this area by promoting transparency in implementing SPS measures and improving the technical capacity of AfCFTA states to monitor and implement these measures. Cooperation in SPS measures is based on the following principles:
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Risk Assessment: SPS measures developed by Member States should be based on assessments that analyse the level of risk to human, animal and plant health and life using scientific evidence, sampling and testing methods and relevant inspection. Relevant economic factors and potential damages to production and sales in the event of a disease must also be taken into account. The AfCFTA also allows for SPS measures to be based on those developed by international organisations, should states feel they do not have the scientific capacity to indigenously develop their SPS measures.
Equivalence: The SPS measures developed by state parties must be recognised equally by both importing and exporting states. Equivalence allows for mutual recognition of measures on both bilateral and multilateral levels.
Harmonisation: To promote further cooperation in SPS measures, States are encouraged to cooperate and work towards harmonising their rules at the regional level. State parties shall do so by basing their measures on international standards, relevant guidelines, and recommendations. These guidelines are issued by organisations such as the International Plant Protection Convention (IPPC), the World Organisation for Animal Health (OIE) and the Codex Alimentarius Commission (CAC).
Inspections, Verifications and Fees: State Parties can conduct audits and verification checks to ensure that SPS measures under the AfCFTA are being implemented and monitored based on the set guidelines. The costs of the same are to be borne by the State Parties themselves. Further, Member States can also carry out inspections for imports and exports based on guidelines established by international standard bodies.
Transparency: To ensure clarity, trust and predictability, Parties while formulating, implementing, and monitoring their SPS measures must comply with the obligations of the SPS Sub-Committee under the AfCFTA. State parties must also identify and designate a national focal point that acts as an intermediary between coordination procedures at the regional and national levels. Mutual exchange of information on SPS measures must also be promoted between states on matters such as quarantine restrictions, pests or diseases and food safety issues.
Technical Consultations: State Parties can request technical consultations with other Parties in the event of significant concerns concerning food safety, plant health or animal health. The responding party has 30 days to decide on the requesting Parties concerns and information will be provided to avoid disruption to trade.
Emergency: There are also provisions for emergency SPS measures in the event of an unforeseen disease outbreak. In such a case, State Parties must notify emergency SPS measures within 48 hours of the decision to implement the emergency measure.
To monitor the progress of SPS measures, a sub-committee on Sanitary and Phytosanitary measures will be established. The sub-committee will be composed of representatives from State Parties who will monitor, review, and provide direction to the implementation of SPS measures listed under the AfCFTA. The sub-committee will also facilitate understanding between state parties and collaborate with other sub-committees to facilitate intra-African trade. Implementing capacity-building measures and identifying opportunities to encourage the bilateral exchange of information will be additional responsibilities of the sub-committee.
Technical Barriers to Trade
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Technical barriers to trade (TBT) refer to non-tariff measures that hinder or restrict international trade through the imposition of technical regulations, standards, conformity assessments and other procedures. If States can improve cooperation on TBTs, unnecessary and unjustifiable technical barriers to trade can be eliminated. This can be done through promoting the use of international standards, and reinforcing international best practices in regulation and standards setting.
Standardisation: To facilitate trade, Member States must cooperate with each other’s respective standardisation bodies. States must develop and promote the adoption of standards developed by the African Organisation for Standardisation (ARSO) and the African Electrotechnical Standardisation Commission (AFSEC). National focal points must be identified to ensure that exporters and importers in Member States are aware of the standards developed by these organisations. Membership in additional regional and international standardisation organisations is also encouraged through the AfCFTA.
Technical Regulations: Compliance with technical regulations is based on the WTO TBT Agreement and the use of international standards as a basis for technical regulations.
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Conformity Assessments: To promote further cooperation and harmonisation, conformity assessments must be used as a tool to facilitate trade between states. The results of conformity assessments must be mutually accepted by state parties and recognised under appropriate multilateral agreements.
Accreditation: The AfCFTA encourages its Member States to support and use African accreditation bodies to help them gain international recognition. The AfCFTA also encourages Member States’ increased participation and recognition of the African Accreditation Cooperation (AFRAC) and use it as a tool to facilitate intra-African trade.
Technical Assistance and Capacity Building: Member States must cooperate in seeking and providing technical assistance and capacity building in areas about standards, technical regulations, conformity assessment, accreditation, metrology, and other related matters that are of mutual interest. The AfCFTA Secretariat will establish a joint work programme to enhance Member States’ capacities to effectively meet their obligations relating to TBT.
To monitor the progress of TBT measures, a sub-committee on the Technical Barriers to Trade will be established that will be composed of representatives from State Parties. The sub-committee will be responsible for developing procedures to implement cooperation in TBT measures, implement capacity-building programmes and promote cooperation to use existing human, scientific and technical resources. It is also tasked with identifying areas for collaboration in developing infrastructure that supports standards, technical regulations, accreditation, metrology, and conformity assessments.
Rules of Origin
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Rules of Origin (RoO) determine the national origin of a product by establishing the specific criteria that must be met for the product to be considered originating from a country and to benefit from tariff preferences. These criteria are based on several factors, including the sourcing of inputs, any manufacturing process involved and the value addition. Like other free trade agreements, under the AfCFTA, goods qualify for preferential tariff treatment if they originate in the Member States. Goods not originating from the Member States are subject to MFN tariff rates.
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Criteria for Determining Origin under the AfCFTA:
Annex 2 of the AfCFTA agreement (also referred to as Annex on RoO) details the criteria for determining eligibility for preferential treatment. Article 4 of Annex 2 states that a product will be considered originating from a country if it has been wholly obtained or has undergone substantial transformation in that country:
Wholly Obtained:
Wholly Obtained (WO): Products are regarded as WO in a Member State if only that Member State has been involved in the production of these products. Materials from outside the AfCFTA cannot be used in their production and any use of such materials disqualifies the products from being WO.
Example: Hides obtained from cattle that are born, raised, and slaughtered in Ethiopia.
Sufficiently worked or Processed Products:
Value-Addition: A product is considered originating if the value of manufacturing increases the value of the final product to a specified minimum threshold of domestic content required (expressed as an ad-valorem percentage).
Example: Pasta is subject to a value addition rule of 40% where the materials used exceed 40% of the ex-works price of the product.
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Non-Originating Material Content: This rule confers origin to a product if the amount of non-originating raw materials allowed is below a specific limit.
Example: Pharmaceutical products are subject to the Non-Originating Material Content rule where manufacture in which the value of the materials used does not exceed 60% of the ex-works price of the product grants originating status to the product.
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Change in Tariff Heading: This rule is fulfilled if a product is manufactured from raw materials with a tariff code that is different from the final product.
Change in Tariff Heading (CTH): The finished goods are considered to be sufficiently worked or processed when the non-originating materials used in production are classified within a tariff Heading that is different from that of the finished Product.
Example: Soap bars (HS 3401) that are manufactured from animal fat (HS 1506) and perfume (HS 3302).
Change in Tariff Sub-Heading (CTSH): Finished goods are considered to be sufficiently worked or processed when the non-originating materials used in production are classified within a tariff Sub-heading that is different from that of the finished Product.
Example: Razors (HS 8212.10) that include safety razor blades (HS 8212.20)
Specific Processing: A product is considered as originating under this rule if it undergoes the manufacturing operations detailed in Annex 2 of the Agreement.
Example: Diamonds (HS 7102) must undergo polishing to transform rough and unworked diamonds.
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It should be noted that Article 7(2) of the Annex on RoO states that agricultural products partially or fully obtained from food aid, monetisation or other assistance measures, including arrangements on non-commercial terms, will not be considered originating in a Member State.
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Cumulation of Origin: The AfCFTA also allows for cumulation of origin, i.e. raw materials or semi-finished goods originating in one AfCFTA Member State that undergo sufficient working or processing in another AfCFTA Member State, can be considered as originating in the Member State where the final processing or manufacturing occurs.
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Example: Suppose Mauritius imports fibre from Spain and makes yarn which is exported to South Africa where it is turned into fabric. This fabric is then shipped to Kenya where it is processed into women’s clothing. The cumulation rules allow for the women’s clothing produced in Kenya to be considered as originating in Kenya.
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Working or Processing not Conferring Origin: Article 7(1) of the Annex on RoO describes a list of operations that are insufficient to confer origin on a product irrespective of whether the requirements of Article 4 on origin conferring criteria are satisfied. These operations include, amongst others, disassembly or assembly; washing or cleaning; basic pressing or ironing; painting; and packaging among others.
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Example: Suppose Ghana imports automotive parts from Japan to assemble pick-up trucks at a site on the outskirts of Accra. The pick-up trucks retain their Japanese origin because assembly is insufficient to confer origin.
Documentation for Proof of Origin
Regarding the documentation required to show proof of origin, Member States can submit a Certificate of Origin issued per the Member State’s national legislation. Alternatively, an Origin Declaration may be submitted by:
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An exporter who frequently exports products covered by the Annex on RoO and complies with all requirements and who is designated as an Approved Exporter by the Member State’s competent authority; and
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An exporter of consignments consisting of one or more packages of originating products valued at less than USD 5,000.
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Example: An exporter in Rwanda, wishing to benefit from tariff preferences under the AfCFTA for the exports of coffee to Ghana, should submit an application for a certificate of origin along with the invoice and packing list to the Customs Service Department. The latter will evaluate the application before issuing the Certificate of Origin.
The AfCFTA Secretariat’s Manual on Rules of Origin is an excellent resource for more detailed information on the AfCFTA Rules of Origin. It can be accessed here.
Trade in Services
The AfCFTA aims to create a single liberalised market for trade in services through the Protocol on Trade in Services which was adopted in 2019. Article 1(p) of the Protocol defines Trade in Services as the supply of service in the four different modes of supply as follows:
Article V of the General Agreement on Trade in Services (GATS) on Economic Integration establishes the rules that WTO members must abide by when entering into an agreement liberalising trade in services. These include the requirement for the agreement to cover substantially all services sectors, to eliminate existing discriminatory measures in all sectors covered and to prohibit the entry into force of new or more discriminatory measures.
The Protocol also details the objectives of the Agreement with regard to trade in services. These include among others:
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Enhancing the competitiveness of services through economies of scale, reduced business costs, enhanced continental market access, and an improved allocation of resources including the development of trade-related infrastructure;
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Progressively liberalising trade in services across the African continent on the basis of equity, balance and mutual benefit, by eliminating barriers to trade in services;
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Pursuing services trade liberalisation in line with Article V of the General Agreement on Trade in Services by expanding the depth and scope of liberalisation and increasing, improving and developing the export of services, while fully preserving the right to regulate and introduce new regulations.
Liberalisation of Trade
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The provisions relating to the liberalisation of trade, contained in the Protocol on Trade in Services, play a crucial role in ensuring the smooth flow of services among Member States. The Protocol specifies that Member States will negotiate sector-specific obligations by developing regulatory frameworks for each sector, as necessary, taking into account best practices and acquis from the Regional Economic Communities (RECs) and the negotiated agreement on sectors for regulatory cooperation.
It also stipulates that the liberalisation process will focus on the progressive elimination of the adverse effects of measures on trade in services to provide effective market access to boost intra-African trade in services. The Protocol also includes a provision for a List of Priority Sectors to be annexed to the Protocol.
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The AfCFTA has prioritised five service sectors to be liberalised under the Agreement, namely business services; communications; financial services; transport; and tourism. Other service sectors will be progressively liberalised over time.
Business Services
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All Professional Services
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Computer and Related Services
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Research and Development Services
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Real Estate Services
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Rental/Leasing without operators
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Other Business Services
Communication Services
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Postal Services
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Courier Services
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Telecommunications Services
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Audiovisual Services
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Others
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Financial Services
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Insurance and Insurance Related Services
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Banking and Financial Services
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Other Financial Services
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Transport Services
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Maritime Transport Services
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Internal Waterways Transport
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Air Transport Services
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Space Transport
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Rail Transport Services
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Road Transport Services
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Pipeline Transport
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Services auxiliary to all modes of transport
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Other transport services
Tourism Services
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Hotels and Restaurants (inc. catering)
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Travel agencies and tour operators
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Tourist guide services
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Other
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Non-Discrimination
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Non-discrimination is a key principle in the AfCFTA’s Protocol on Trade in Services. The aim is to foster equitable trade relations among Member States while promoting economic growth and cooperation.
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Most Favoured Nation: According to the Protocol, Member States are required to accord Most-Favoured-Nation (MFN) treatment to each other. MFN treatment means that Member States must provide the same benefits and advantages to all other Member States and must accord to services and service suppliers of other Member States treatment no less favourable than that which they accord to services and service suppliers of any third country.
Suppose Morocco allows Egypt's construction companies to establish and operate construction projects within its territory, following the MFN principle, Morocco must extend the same permission to all other members of the AfCFTA for their construction companies as well.
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However, the Protocol also provides for exemptions from the MFN treatment obligation, provided that any measures inconsistent with the latter are listed in an agreed MFN exemption list. The MFN exemption list will undergo regular reviews to determine which exemptions can be eliminated.
National Treatment: The provision on National Treatment, contained in the Protocol, establishes the obligation for Member States to provide services and service suppliers of other Member States treatment no less favourable than it offers local services and service suppliers. National treatment can be subject to conditions and qualifications, which must be agreed between Member States concerned, and specified in the Member State’s Schedule of Commitments.
Special and Differential Treatment: One of the core objectives of the AfCFTA is to ensure mutually beneficial trade. In order to achieve this objective, Member States are expected to provide flexibility to other Member States based on their different levels of economic development or individual specificities. These include:
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the provision of special consideration to the progressive liberalisation of service sectors' commitments and modes of supply;
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consideration of the challenges that may be encountered by State Parties and the adoption of measures to accommodate the special economic situations and development, trade and financial needs of countries in implementing this Protocol; and
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provision of technical assistance and capacity-building through continental support programmes.
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Mutual Recognition
Article 10 of the Protocol on Trade in Services of the AfCFTA talks about how countries within the AfCFTA can recognise each other's qualifications and certifications for service providers. This helps make it easier for professionals from one country to offer their services in another country without having to go through a lengthy process of requalification.
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Recognition of Qualifications: A country within AfCFTA can agree to accept the education, experience, licenses, or certifications that service providers have obtained in another AfCFTA country. This recognition can be based on an agreement between the countries or can be given independently.
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Equal Opportunity: If a country has an agreement with one country for recognising qualifications, it should give other AfCFTA countries a fair chance to join that agreement or negotiate a similar one. If recognition is done independently, other countries should have a chance to show that their qualifications should also be recognised.
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No Discrimination or Trade Restrictions: Countries cannot recognise qualifications in a way that discriminates against other AfCFTA countries or secretly limits trade in services.
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Information Sharing: Each country should let the AfCFTA Secretariat know about its existing recognition measures within a year of the agreement taking effect. They should also inform other countries in advance if they plan to negotiate agreements for recognition, and they should share updates when they make changes to their recognition measures.
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AfCFTA Standards: Whenever possible, recognition of qualifications should follow standards that AfCFTA countries have agreed upon. Countries should also work together with organizations to establish common standards and criteria for recognition and for the practice of various professional services.
Investment
The AfCFTA holds significant potential for driving economic growth and prosperity through increased investment across the continent. The Agreement seeks to create a conducive environment for both domestic and foreign investments by promoting transparency, predictability, and the protection of investments.
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Investment Protection Standards
The AfCFTA Protocol includes provisions outlining the standards and principles for protecting investments under the AfCFTA. It comprises key aspects pertaining to investment treatment, exceptions, and other measures to ensure fair and equitable treatment for investors. The aim of the Protocol, in this respect, is to balance the rights of investors with that of the sovereign prerogatives of the Host State, thereby establishing a conducive environment for cross-border investments within Africa. The investment protection standards provide certainty, transparency, and predictability for investors while respecting the legitimate policy objectives of Member States.
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National Treatment: Member States must accord national treatment to investors of another Member State and their investments in like circumstances, i.e., AfCFTA Members must provide treatment no less favourable than it accords to its own investors. National treatment applies to the management, conduct, operation, use, expansion and sale or other disposition of their investments.
Imagine a Ghanaian company has invested in the agricultural sector of Kenya. The national treatment provision dictates that Kenya must treat the Ghanaian investor as favourably as its own investors. For instance, if Kenya provides subsidies to its local farmers, it must provide the same to the Ghanaian investors operating farms within its borders.
Most Favoured Nation: Each Member State must accord most-favoured-nation treatment to investors of another Member State and their investments in like circumstances, i.e., AfCFTA Members must provide treatment no less favourable than it accords to investors of any other State or Third Party with respect to the management, conduct, operation, use, expansion and sale or other disposition of their investments.
Imagine a South African company that wishes to invest in Mauritius’ pharmaceutical sector. The most-favoured national treatment provision in the AfCFTA dictates that Mauritius must treat all African investors as favourably as all other investors. For instance, if Mauritius provides tax holidays to Indian investors in the pharmaceuticals sector, it must provide the same to South African investors investing within its borders.
What constitutes ‘Like Circumstances’ for National Treatment and Most-Favoured National Treatment?
‘Like circumstances’ requires a case-by-case examination of all investment circumstances. Some factors taken into consideration include:
• Effects on third parties and local communities.
• Impact on local, regional, or national environment and public health.
• Investor's sector of activity.
• Purpose of the measure in question.
• Applied regulatory process.
• Other relevant factors tied to the investment or investor.
Administrative and Judicial Treatment: Each Member State must guarantee fair and just treatment to investors from another Member State and their investments when it comes to administrative and judicial proceedings. This includes preventing fundamental denial of justice, ensuring due process, avoiding arbitrariness, preventing discrimination based on gender, race, or religious beliefs, and refraining from abusive treatment in administrative and judicial processes. This ensures a level playing field for both parties and upholds the principles of justice and equity.
Imagine a scenario where an Egyptian investor is involved in a commercial dispute with a local business in Senegal. In the ensuing legal proceedings, the court in Senegal must ensure that the investor from Egypt receives the same fair treatment and due process as any local investor, without any discrimination or bias.
Physical Protection and Security: Member States must accord to investors and their investments physical protection and security no less favourable than that which it accords to its own investors or the investments of the investors of any other State Party or Third Party, i.e., physical protection and security is subject to the national treatment and most-favoured nation principles. Investors who encounter losses because of a failure of the Host State, for reasons such as war or other armed conflict, revolution, revolt, insurrection, or riot must provide restitution, indemnification, compensation, or other settlement by abiding by the national treatment and most-favoured nation principles.
Expropriation: State Parties should not directly or indirectly, expropriate or nationalise investments in their territory. Expropriation involves expropriation or nationalisation through a formal transfer of ownership, outright seizure; or from a measure or a series of measures having an equivalent effect of direct expropriation without formal transfer of title or outright seizure.
However, where expropriations are permitted for a public purpose, the Host Party should do so in accordance with due process established by the laws in the country; in a non-discriminatory manner; and against a fair and adequate compensation paid within a reasonable period.
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Transfer of Funds: Member States must allow all transfers relating to an investment to be made freely and without delay in and out of the territory after payment of the respective taxes and duties. These transfers may include initial capital, profits, dividends, royalties, interests, proceeds from sales or liquidation, loan repayments, license fees, payments for services, wages, and compensation linked to dispute settlement mechanisms.
Member States must allow transfers to be made in the currency of the host economy, or any other currency recognised by the IMF, at the market rate of exchange prevailing on the date of the transfer.
However, Member States also have the authority to impose impartial restrictions on the transfer of funds linked to investments within their jurisdiction. Restrictions can be imposed on investors regarding meeting tax responsibilities, addressing bankruptcy or creditor rights, dealing with criminal activities and asset recovery, facilitating financial oversight, ensuring legal compliance, safeguarding social security and employee rights, and countering money laundering and terrorism financing.
In certain circumstances, a Member State may adopt or maintain non-discriminatory measures that do not conform with the obligations on the free transfer of funds. These include events and threats of serious balance-of-payments deficits or external financial difficulties; and exceptional circumstances where movements of capital can cause or create risks of serious economic or financial difficulties in the Host State.
Sustainable Development
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The Protocol puts forward a framework for sustainable development within the context of investment under the AfCFTA. It emphasises Member States’ right to regulate investment within their borders in ways that align with their development goals and national policies and priorities regarding the environment, health, climate action, social and economic objectives, and essential security interests. The Protocol, in this sense, aims to ensure that investments are aligned with broader societal and environmental objectives, fostering responsible and mutually beneficial outcomes.
Minimum Standards on the Environment, Labour, and Consumer Protection: Member States must ensure that environmental, labour and consumer rights are protected in accordance with domestic policies, international best standards, and relevant international agreements to which they are parties.
Member States should not promote investment within their jurisdictions by relaxing or waiving domestic standards, or compliance with environmental, labour and consumer protection laws and international minimum standards.
Investment and Climate Change: Taking into consideration domestic climate change policies, the principle of Common but Differentiated Responsibilities, and relevant international climate change instruments, each AfCFTA Member State must:
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Promote and facilitate investments that mitigate greenhouse gas emissions and adapt to the negative impacts of climate change;
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Promote and facilitate investments that are conducive to the financing of regional climate mitigation and adaptation programmes;
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Promote a fair and just transition in sectors such as renewable energy, and low-carbon technologies;
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Promote the adoption of policy frameworks that are conducive to the transfer and deployment of climate-friendly technologies and goods and services;
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Promote and encourage new investment regimes, such as low or zero-carbon Special Economic Zones; and
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Encourage investments that mitigate climate change impacts on exhaustible natural resources such as fresh water and biological diversity.
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​Investment, Public Health, and Pandemics: The AfCFTA Member States have the right to determine their public health policies and priorities. They can establish their own levels of domestic public health protection and adopt or modify their relevant laws and measures in the context of epidemics, pandemics, and other public health emergencies.
Member States are expected to promote and facilitate investments in the public health sector and the subsectors and related industries, including medical equipment, pharmaceuticals, especially for chronic diseases, vaccines, and Intensive Care unit requirements.
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Pursuit of Development Goals: Member States have the possibility of introducing measures to promote domestic development including local content. These could include:
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Preferential treatment for qualifying enterprises to achieve development goals.
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Support for local entrepreneurs, strengthening local capabilities and networks.
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Enhancing productivity, employment, and wealth creation through capacity development, training, and research.
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Appointing nationals for appropriate leadership roles.
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Promoting technology transfer and innovation; and
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Addressing economic disparities suffered by identifiable ethnic or cultural groups, including historically marginalised groups or geographical regions and localities.
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Human Resources Development
Member States must develop national policies to guide investors in developing the human capacity of the labour force, including for mid-level and managerial positions. These could include incentives to encourage employers to invest in training, capacity building and knowledge transfer. Particular attention must be given to the needs of youth, women, persons with disabilities and vulnerable groups.
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Transfer of Technology
State Parties are encouraged to facilitate the intra-regional and international transfer of technology. These may include measures such as encouraging investors to adopt practices that allow the transfer and rapid diffusion of technologies and know-how, with due regard to the protection of intellectual property rights; fostering conditions that encourage investors to undertake research and development; and granting credits on preferential terms for financing the acquisition of capital and intermediate goods, among others.
Investor Obligations
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The Protocol also stipulates the responsibilities and ethical standards expected from investors and their investments within the context of the AfCFTA. One of the core obligations that investors have under the AfCFTA is that they are required to conduct their operations in compliance with relevant domestic laws and regulations applicable in the host country and also need to adhere to applicable international law. This includes standards of corporate governance, fair market transactions, and compliance with tax laws. In addition, other obligations that arise include:
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Business Ethics, Human Rights and Labour Standards: Investors must adhere to high standards of business ethics, human rights, and labour standards. In this respect, investors are expected to support and respect internationally recognised human and labour rights, including compliance with the International Labour Organization’s standards and fundamental principles.
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Environmental Protection: Investors and their investments have an obligation to respect and protect the environment. They must apply the precautionary principle as well as prevention in order to mitigate any significant risk and harm to the environment. Environmental impact assessments must also be undertaken with regard to proposed investments. Investors cannot exploit or use natural resources that infringe on the rights and interests of the Host State and local communities.
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Indigenous Peoples and Local Communities: Investors should respect the rights and dignity of indigenous peoples and local communities in accordance with the domestic laws and regulations applicable in the host country as well as international rights and standards. This includes respecting the right to free, prior, and informed consent and respecting legitimate tenure rights to land and resources, including water, fisheries, and forests.
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Socio-Political Obligations Anti-Corruption: Investors must abstain from interfering in the internal affairs of countries, especially when it comes to intergovernmental relations or the appointment of officials to public office. Investors and their investments are prohibited from engaging in a form of corruption and are encouraged to cooperate with State Parties to prevent and eliminate corruption.
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Corporate Social Responsibility and Corporate Governance: Investors are strongly encouraged to contribute to the sustainable development of the Host State and local communities through the adoption of responsible practices.
Management and Settlement of Disputes
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The Protocol outlines the mechanisms and procedures for the management and settlement of disputes related to investment. A fair and well-defined dispute settlement process enhances a country's attractiveness to foreign investors. The Protocol seeks to establish a comprehensive approach that can provide both host countries and investors with greater certainty and security.
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State-State Dispute Settlement: If countries have disagreements about how to follow the rules in this Protocol, they can have recourse to the steps and rules outlined in the "Protocol on the Rules and Procedures on the Settlement of Disputes" to resolve any disagreements.
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Dispute Resolution: In the case of a dispute between an investor from a Member State and the Host State, they should first aim to resolve it amicably through consultations, negotiations, conciliation, mediation, or other means available in the Host State.
If the dispute cannot be solved amicably, the concerned parties can have recourse to other mechanisms that will be established in the Rules and Procedures governing Dispute Prevention, Management and Resolution of Disputes. These rules are yet to be negotiated and agreed upon.
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Investor Liability: Investors can be subject to civil actions in the judicial process of their Home State for the acts, decisions or omissions made in the Host State where such acts, decisions or omissions lead to damage, personal injuries, or loss of life in the Host State. However, this does not exclude the possibility of bringing civil actions against investors and their investments before the domestic courts of the Host State.
Competition Policy
Competition Policy refers to guidelines established to regulate the market and create a level playing field for businesses. In the absence of such policies anti-competitive practices such as cartels and monopolies that abuse their market position, arise. Competition policy through its implementation prevents patent misuse, predatory pricing, price fixing and anti-competitive mergers. This extends benefits to businesses, consumers and governments. These types of anti-competitive practices reduce choice, increase prices, and thus deny consumers and other excluded producers the benefits of trade liberalisation.
Competition policy is recognised as one of the key drivers of economic growth as it presents an avenue for markets to grow at the regional and international levels. The importance of competition policy becomes significant with the implementation of the AfCFTA. The current capacity of existing competition policies is restricted to a territorial basis that can address anti-competitive practices only by foreign actors in domestic markets. Hence, the primary objective of the AfCFTA’s Protocol on Competition is to establish an integrated and unified African continental competition regime for improved market efficiency, inclusive growth, and the structural transformation of the African economies. The Protocol also aims to promote economic integration and sustainable development in the AfCFTA Market and manage the interrelationships of competition regimes and sectoral regulatory laws at the national, regional, and continental levels.
Anti-Competitive Business Practices and Conduct
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The AfCFTA is dedicated to countering anti-competitive business practices. The scope of application of the Protocol is comprehensive, spanning across different economic activities conducted by individuals or entities that have an impact on competition within the continental market. However, the Protocol does not apply to matters that fall under the jurisdiction of national competition authorities.
Labour-related issues aimed at advancing the terms and conditions of employment; or collective bargaining agreements on behalf of employees for the purpose of fixing terms and conditions of employment are also not under the purview of this Protocol.
Anti-Competitive Practices
The Protocol outlines specific practices that are considered incompatible with ensuring the effective functioning of the market. These include:
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Agreements between business entities or companies or an association of business entities or companies and concerted practices between them which have, as their objective or effect, the prevention, restriction or distortion of competition in the Market (Example: collusion between competing gas station owners to fix fuel prices at a certain level to eliminate price competition and maintain higher profits.)
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Abuse by one or more undertakings of a dominant position in the Market (Example: A large internet search engine intentionally manipulates its search results to prioritise its own services and products over competitors', thereby stifling competition and limiting consumer choice.)
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Mergers or acquisitions that are likely to prevent, restrict or distort competition in the Market, especially by giving rise to the creation or strengthening of a dominant position; (Example: A leading pharmaceutical company acquires a smaller competitor with a unique drug, effectively eliminating an alternative treatment option and leading to higher prices for consumers.)
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Abuse of economic dependence and any other anti-competitive practices. (Example: A dominant supplier of a critical raw material uses its position to dictate pricing and terms to manufacturers who rely on that material, inhibiting the ability of manufacturers to seek alternative sources.)
Prohibited Horizontal and Vertical Business practices: Horizontal business practices refer to circumstances where companies that are competitors or potential competitors make agreements or decisions that limit competition between them while vertical business practices involve agreements or actions between companies that are at different levels of the supply chain, for instance, a supplier and a retailer. These practices can affect how products are priced, sold, or distributed and thereby impact competitiveness in the market.
The Protocol outlines the prohibited horizontal business practices within the AfCFTA competition policy framework. The Protocol prohibits any agreements, decisions made by groups of businesses, or coordinated actions among business associations that are competitors or could compete in the market, which involve certain limiting practices. These practices include fixing prices, restricting production or sale, collusive bidding, market allocation, refusal to purchase or supply, and denial of access to essential arrangements.
As for vertical business practices, the Protocol prohibits setting a minimum resale price. However, a supplier or producer can suggest a minimum resale price to a reseller, as long as they clarify that it's not mandatory. If the product's price is displayed, it must include the label "recommended price" next to it. Moreover, restrictions on passive sales and other vertical practices can be deemed anti-competitive.
However, with regard to both horizontal and vertical business practices, the Protocol also allows for certain exemptions such as:
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cooperation on research and development;
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joint ventures intended to achieve economic development;
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measures to promote sustainable development, growth, transformation, or stability of any industry;
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measures fostering competitiveness and efficiency gains that promote employment or industrial expansion; and
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activities of professional associations designed to develop or enforce professional standards of competence reasonably necessary for the protection of the public.
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Abuse of dominant position: The Protocol highlights how abuse of a dominant position in the market by business entities is to be dealt with. To determine market dominance, factors like market share, concentration, and market power are considered. The Protocol prohibits the misuse of one’s dominant position in a way that harms competition. This can include actions such as eliminating competitors, imposing unfair prices, limiting production, or denying access to necessary resources.
Mergers and Acquisition: The provisions on mergers and acquisitions apply when the acquiring and target companies operate directly or indirectly in the AfCFTA market and meet certain turnover or asset thresholds to be specified in other regulations.
Any companies, meeting the conditions, seeking to merge must notify the AfCFTA Competition Authority to obtain its approval. A merger happens when there's a lasting change of control due to amalgamation, acquisition, or joint ventures. If a merger lessens competition substantially or strengthens dominance, it will contravene the provisions of the AfCFTA. To determine whether a merger has the potential to distort competition, the AfCFTA Competition Authority considers factors like market structure, barriers to entry, and public interests. Following a review, the AfCFTA Competition Authority can approve a merger with or without conditions or outrightly deny it. Moreover, the AfCFTA Competition Authority can also revoke its decision if the information provided for review is found to be incorrect, the approval is deceitful, or the business entity is found to be in breach of its obligations.
Abuse of economic dependence
The Protocol equally addresses the abuse of economic dependence and other anti-competitive practices. Economic dependence occurs when suppliers or buyers of certain goods or services are dependent on certain business entities and cannot easily switch to other options, and there's an imbalance in power.
It's prohibited for businesses in a dominant position to abuse their power over customers or suppliers in a way that harms competition. In the event of such a dependence, anticompetitive practices can arise if the gatekeeper or core platform (dominant firm in the relationship) exploits its position vis-a-vis a supplier and if such conduct affects the structure of the market. It is prohibited for gatekeepers and core platforms to:
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imposing price or service parity clauses on business users;
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imposing anti-steering provisions, or otherwise preventing business users from engaging consumers directly outside of a core platform;
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using business user data to compete against the business user;
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self-preferencing of services or products offered by the gatekeeper on a core platform;
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differentiation in fees or treatment against small and medium enterprises;
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placing restrictions on the portability of data or other actions that inhibit switching platforms for business and end-users;
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failing to identify paid ranking as advertising in search results and to allow paid results to exceed organic results on the first results page;
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combining personal data sourced from different services offered by the gatekeeper; or
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requiring the pre-installation of gatekeeper applications or services on devices.
Responsibilities of State Parties on National Laws and Notifications
Each State Party must inform other State Parties about their laws, regulations, and international commitments related to the Protocol's matters. If State Parties amend or implement new laws, regulations, or commitments linked to the Protocol, they should inform the Secretariat within six months of these changes taking effect.
As for Member States where there are no existing competition laws, Member States are required to adopt such regulations when this Protocol comes into effect or upon acceding to the AfCFTA Agreement. All Member States are encouraged to align their competition laws with this Protocol for consistency and the laws must adhere to the principles of transparency, independence, and fairness.
Institutional Arrangements
The institutional set-up to guide and monitor competition policy under the AfCFTA comprises a two-tier system, namely the AfCFTA Competition Authority and the Board of Commissioners of the AfCFTA Competition Authority. As an independent legal body that is funded by the AfCFTA Secretariat, the AfCFTA Competition Authority comprises a decision-making body headed by a Chairperson of the Board of Commissioners of the AfCFTA Competition Authority and an Investigative Body headed by an Executive Director.
The AfCFTA Competition Authority is governed by a Board that sets policies, makes decisions on prohibited conduct, approves exemptions and mergers, and supervises the Authority’s administration. The Board is composed of three members from each of the five African Union regions, appointed by the Council of Ministers based on the Secretary-General's proposal. It thus aims to accommodate the diverse interests of participating countries while maintaining a formal hierarchy to ensure transparency and accountability. The Chairperson and Vice-Chairperson are elected by the Board and must be from different regions. A representative of the AfCFTA Secretariat is also expected to participate in the meeting of the Board, although they do not hold any voting rights. Board members are nominated based on their expertise in competition policy, economics, commerce, or public policy and must be citizens of AfCFTA State Parties.
The Investigative Body, for its part, is tasked with the enforcement of the Protocol. Some of its core responsibilities include:
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Assessing mergers and acquisitions
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Investigating anti-competitive practices
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Conducting market studies and advising the Council of Ministers
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Reviewing exemption applications
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Regularly evaluating and suggesting improvements to the Protocol
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Supporting State Parties in enhancing national competition laws and bodies
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Collaborating with national and regional competition authorities; non-African competition authorities; and sector regulators, whether they handle competition matters or not.
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The AfCFTA Competition Authority has the prerogative of imposing sanctions on business entities in response to any anti-competitive actions undertaken. These include:
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Stopping anti-competitive agreements or practices
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Ordering remedies for anti-competitive practices
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Approving or disapproving mergers with or without conditions
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Granting, denying, or attaching conditions to exemption applications
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Imposing fines up to 10% of an undertaking's turnover (continental or worldwide)
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Concluding matters through administrative settlements
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Issuing administrative directives
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Fines can be imposed for violations of Article 6, Article 7, Article 9, and Article 11 and for failing to notify a merger meeting specified thresholds. Repeated offences will lead to aggravated sanctions. These sanctions are imposed if an undertaking or person fails to comply with any decision of the Board. Moreover, in cases where a violation is suspected, the AfCFTA Competition Authority can issue interim orders to prevent harm to competition during ongoing investigations.
Upon the violations or business conduct in an anti-competitive manner, businesses may be subject to financial penalties, remedies or exemptions. Repeated behaviours are subject to aggravated sanctions.
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Dispute Settlement
Disputes arising among Member States in relation to their rights and obligations under the Protocol shall be resolved in accordance with the Protocol on Rules and Procedures on the Settlement of Disputes under the AfCFTA Agreement.
Moreover, the AfCFTA Protocol on Competition Policy also provides for a Tribunal as an independent and autonomous legal body that is responsible for decisions on appeals taken against the Board of the Authority while implementing this Protocol. The Tribunal’s decision is binding on all Parties in the dispute.
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Other Provisions
The Protocol also includes a provision aiming to design a roadmap for establishing a unified African continental competition regime. In this respect, the Assembly of Heads of State and Government will collaborate to develop the roadmap considering national and regional competition authorities' roles as per the Abuja Treaty. The Authority's operationalisation will follow the roadmap, which will become a part of this Protocol once approved by the Heads of State and Government.
It should also be noted that the Competition Authorities of the Regional Economic Communities (RECs) shall retain their jurisdiction and the Council of Ministers will establish regulations and procedures to manage concurrent jurisdiction.
The AfCFTA Secretariat or the AfCFTA Competition Authority, along with regional bodies and development partners, will offer technical aid and capacity-building activities to Member States, facilitating the adoption and implementation of competition laws and the setting up of enforcement bodies. In addition, a network of competition authorities will be formed to enhance coordination, guided by a Regulation developed by the Council of Ministers. The Authority will also identify ways in which cooperation can be improved among Member States.
Intellectual Property Rights
The World Trade Organisation defines Intellectual Property Rights (IPRs) as “the rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time.” IPRs play a critical role in promoting innovation and fostering economic development. The AfCFTA Protocol on IPRs was adopted in February 2023 and aims to establish harmonised rules and principles for the promotion, protection, cooperation, and enforcement of IPRs across the African continent.
The Protocol applies to a wide range of IPRs including plant variety protection, geographical indications, marks, patents, utility models, industrial designs, undisclosed information including trade secrets, layout designs (topographies) of integrated circuits, copyright and related rights, traditional knowledge, traditional cultural expressions, and genetic resources, and emerging technologies and other emerging issues on intellectual property rights, subject to Article 3 of the Protocol.
Most Favoured Nation: Article 5 of the Protocol on Most-Favoured Nation Treatment (MFN) requires that each AfCFTA Member State accord any advantage, favour, privilege or immunity granted to another Member State or Third Party with respect to IPRs to all AfCFTA Member States. The MFN treatment provision is subject to certain exceptions, such as those provided for in international treaties applicable to the Member States.
Suppose that a patent filed in Mauritius is recognised in South Africa with the only requirement being the need to send a copy of the approved patent to the competent authority in South Africa. South Africa needs to provide the same privilege to other AfCFTA Member States.
National Treatment: Article 6 on National Treatment requires that every AfCFTA Member State accord to nationals of other Member States the same treatment as it accords to its nationals with respect to the protection of IPRs, subject to exceptions provided under international treaties applicable to the AfCFTA Member State.
If Ghana grants a 10-year term for copyright protection of domestic authors, it cannot grant a shorter protection term to foreign authors. Additionally, the fees charged to foreign authors for such protection cannot be higher than those imposed on domestic authors.
Exhaustion of IPR: Article 7 on Exhaustion on IPRs adopts the principle of regional exhaustion of IPRs, which means that the rights conferred by an IPR are exhausted when a product is put on the market in any AfCFTA Member State. The principle of regional exhaustion intends to promote free trade and competition in the AfCFTA market.
Suppose that a pharmaceutical company sells a patented drug in Rwanda. The pharmaceutical company cannot prevent the drug from being resold or distributed in any other AfCFTA Member State, such as Mauritius or Uganda.
Cooperation on IPR: Articles 22, 23 and 24 focus on Cooperation on IPRs to support intra-African trade, regional value chain, industrialisation and economic growth. Areas of cooperation include information sharing on national and regional IP policies, laws and institutions; identification of IP issues that require a common rule or harmonisation at the continental level; creating mechanisms for collaboration among relevant stakeholders; promoting public awareness of IPR issues and; facilitating registration of IPRs under the Protocol among others. Cooperation in the administration of IPRs includes automation and streamlining of intra-agency communications through the use of information and communication technologies, exchange of experience and examination of registrable IPRs, capacity building and human resources development.
Enforcement of IPR: With regard to the enforcement of IPRs, Article 25 stipulates that all AfCFTA Member States should have laws and procedures in place to allow IPR holders to take legal action against those who infringe on their rights. This Article also recognises that countries have different administrative, technological, and financial capacities to enforce IPRs and thus provides for the tailoring of enforcement procedures to specific circumstances. Article 27 also requires that Member States put in place laws that allow judicial authorities to grant injunctions in cases of disputes concerning the infringement of IPRs.
An AfCFTA Member State with weak IPR protection works with the World Intellectual Property Organisation to develop and implement an IPR strategy that strengthens the enforcement system and establishes specialised IPR tribunals to allow IPR holders to take legal action in case of infringement in accordance with Article 25 of the Protocol.
Institutional Arrangements: Article 31 of the Protocol also provides for the Establishment of the AfCFTA Intellectual Property Office. The governance and administrative structures, and functions of this office as well as the rules and procedures for the administration and operation of this office are yet to be determined.
E-Commerce & Digital Trade
Several areas of the AfCFTA are still being worked on, especially those related to digital trade. The African Union's Agenda 2063 highlights the importance of developing digital economies to enhance continental integration and achieve sustainable and inclusive growth. Similarly, its Digital Transformation Strategy for Africa (2020-2030) mentions that integrating Africa into a single digital market will create economies of scale and opportunities to grow Africa's economies, with the ability to adapt to digital trade and financial services as the key to unlocking these opportunities. The AfCFTA Protocol on E-commerce is being negotiated in this context, while no public information on the Protocol's content is accessible yet. It is worth mentioning that comparable efforts to promote digital trade exist in African regional economic groupings.
In February 2020, an official decision was made to include e-commerce in a third phase of negotiations, to be known as the Protocol on Digital Trade. This protocol was subsequently moved into the current Phase II negotiations. This framework attempts to improve connections between African countries, encourage e-commerce, and expedite customs procedures. Negotiations towards this protocol are widely expected to be concluded in 2023. The AfCFTA Protocol on Digital Trade could serve as a foundation for domestic and regional policy convergence. Numerous best practices in global bilateral agreements are being used. A comprehensive agreement with legally binding and enforceable measures might significantly improve continental integration in general and the digital economy in particular.