The African Continental Free Trade Treaty (AfCFTA) is an international treaty that regulates trade between African countries. Already in 1963 the Organization of African Unity was founded with the aim of promoting cooperation between African states, a plan was created that should minimize Africa’s dependence on the West, thanks to this in 1991 was signed the Treaty of Abuja that created the African Economic Community, an organization that promoted the development of free trade areas, customs unions, an African Central Bank and an African Monetary Union. On July 7, 2019, the leaders of the African Union met to create the Free Trade Treaty. The objectives of the treaty are:
– revitalize the African trade area.
– create new jobs.
– the removal of customs duties.
– stimulate a new competitive economy.
The treaty came into force on May 30, 2019 in 24 countries, in all have signed 54 countries out of 55, the United Nations Economic Commission for Africa predicts an increase in trade of 52% by 2020 compared to its percentage today which is 16%. According to article 4 of the AfCFTA, signatory states shall progressively eliminate tariff and non-tariff barriers to trade in goods, progressively liberalize trade in services, cooperate on investment, intellectual property rights and competition policy, cooperate in all related trade areas, cooperate on customer issues and on the implementation of trade facilitation measures; create a mechanism for the establishment of disputes related to rights and obligations and establish and maintain an institutional framework for the implementation and administration of AfCFTA. By eliminating barriers to trade in goods and services, it would create the largest free trade area in the world, with over 1.2 billion consumers. The creation of this free trade area can represent an important development opportunity for African countries with an improvement in their living conditions.