African Continent Free Trade Area (AfCFTA): What is it and how may it affect business travel?

January 1st, 2021 was a historic day for the future of travel and the movement of people in Africa. The African Continental Free Trade Agreement (AfCFTA), which creates the largest free trade area since the World Trade Organization, was signed by all countries in Africa except Eritrea. Initially envisioned in 2012, the AfCFTA aims to ease the movement of goods, people, and capital amongst the 54 countries of the African continent. 

According to AfCFTA, its general objectives are to: 

(a)  create a single market for goods, services, facilitated by movement of persons in order to deepen the economic integration of the African continent and in accordance with the Pan African Vision of “An integrated, prosperous and peaceful Africa” enshrined in Agenda 2063; 

(b)  create a liberalised market for goods and services through successive rounds of negotiations; 

(c)  contribute to the movement of capital and natural persons and facilitate investments building on the initiatives and developments in the State Parties and RECs; 

(d)  lay the foundation for the establishment of a Continental Customs Union at a later stage; 

(e)  promote and attain sustainable and inclusive socio-economic development, gender equality and structural transformation of the State Parties; 

(f)  enhance the competitiveness of the economies of State Parties within the continent and the global market; 

(g)  promote industrial development through diversification and regional value chain development, agricultural development and food security; and

(h) resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes

In short, the AfCFTA endeavors to “progressively liberalize trade in services” and “to create a single liberalized market for trade in services.”  Achieving this objective would put the AfCFTA in a comparable freedom of movement of labor bloc as to the European Union. 

AfCFTA goes further than merely stating objectives to create a single services market: it has guidelines and road maps for achieving liberalization and standardization of service providers across the continent. For instance, it provides:

For the purposes of the fulfilment, in whole or in part, of its standards or criteria for the authorisation, licensing or certification of services suppliers, and subject to the requirements of paragraph 3 of this Article, a State Party may recognise the education or experience obtained, requirements met, or licenses or certifications granted in another State Party. Such recognition, which may be achieved through harmonisation or otherwise, may be based upon an agreement or arrangement with the State Party concerned or may be accorded autonomously. 

Additionally, it sanctions redress by adding provisions that require adopting countries to create institutions for resolving disputes relating to the liberalized movement of services.

Each State Party shall maintain or institute, as soon as practicable, judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected service supplier, for the prompt review of, and where justified, appropriate remedies for, administrative decisions affecting trade in services. Where such procedures are not independent of the agency entrusted with the administrative decision concerned, the State Party shall ensure that the procedures in fact provide for an objective and impartial review. 

There are additional in-depth provisions within the AfCFTA that provides a roadmap towards an EU-like one market system for services. Prior to liberalization will be many more rounds of negotiation and agreements yet to be conducted.

Will the AfCFTA create a one-market for services similar to the EU in the future? We do not yet know. If the AfCFTA achieves its objective, then travel to and work within Africa will drastically change in the future. To get the AfCFTA signed by 54 nations has been the work of over eight years in the making.   As of February 2021, 36 countries have ratified the treaty. 

https://www.tralac.org/resources/infographic/13795-status-of-afcfta-ratification.html

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