The African Continental Free Trade Agreement (AfCFTA) is a trade agreement between 27 African Union member states. The Agreement seeks to create a single market for goods and services by facilitating free movement of goods, services and investment within the African Continent. It was signed in Kigali, Rwanda, on the 21st of March, 2018. As of July 2019, 54 states have signed the agreement. AfCFTA) is expected to cover all 55 countries of over 1.2 billion people and with a Gross Domestic Product (GDP) in excess of USD2.5 trillion. The scope of the Agreement covers trade in goods, services, investment, intellectual property rights and competition policy. Article XXIV of the General Agreement on Tariffs and Trade (GATT) defines a free trade area as an agreement among a group of two or more customs territories in which the duties and other restrictive regulations of commerce are eliminated on substantially all the trade between the constituent territories in products originating in such territories. There are two main components; Trade in goods – The Treaty provides that a State Party (a member state that has ratified or acceded to the AfCFTA) shall accord to products imported from other State Parties treatment no less favorable than that accorded to like domestic products of national origin, after the imported products have been cleared by customs. Trade in services – With respect to trade in services, Article 20 requires each State Party to accord to services and service suppliers of any other State Party treatment no less favorable than that accorded to its own like services and service suppliers.
The key objective of AfCFTA is to boost intra-African trade through progressive
elimination of tariffs and non-tariff barriers to trade in goods and liberalization of trade in services. The Agreement will also involve cooperation on investment, intellectual property rights and competition policy. Progressively, a deeper integration is expected in form of a single common market, and economic and monetary union, a single African Central Bank and a single African Currency. In addition, it is expected that there will be free movement of people and rights of residence and establishment.
Projected benefits include scale, efficiency and significant welfare gains to the people, employment expansion, and intra-African trade growth in the long-run. The highest positive impact is expected in Agriculture and food as well as industrial goods.
Outstanding issues like the trade concession agreements and rules of origin remain under negotiation. On the 7th of July 2019, at a summit in Niger, the AfCFTA entered its operational phase and a draft is scheduled to be submitted at the January 2020 AU Assembly.
President Muhammadu Buhari signed the AfCFTA agreement in Niger Republic, on the July 7, 2019, making Nigeria the 53rd country to do so. With the signing of the AfCFTA Agreement, Nigeria together with the other signatory states have committed to a ‘progressive elimination of import duties and other non-tariff barriers on imports within the African continent.’
However, it is important to note that Section 12 of Constitution of the Federal Republic of Nigeria provides that an international treaty or agreement would not automatically apply to Nigeria unless the agreement or treaty is ratified by an Act of the National Assembly. Thus, it is expected that the National Assembly would ratify the agreement, to ensure that it becomes operational in Nigeria.