AfCFTA coming into force: What’s next?

At an extraordinary African Union meeting in Kigali on 21 March 2018, 44 out of 55 African states signed the African Continental Free Trade Area (AfCFTA) agreement.After 22 of the member states have deposited their instruments of ratification with the AU Commission on 29 April 2019, the AfCFTA came into force 30 days later, with 24 member states that have deposited their instrument of ratification. Among them are Namibia, South Africa and the Sahrawi Arab Democratic Republic that is recognised by the AU as a member state. However, Africa’s largest economy, Nigeria, is not part of it.While the event reflects the political commitment to continental integration, not much is actually changing on the ground. Negotiations between member states - or in the case of the Southern African Customs Union (SACU), between SACU and other AU member states - are still continuing with respect to tariff concessions, as well as commitments on trade in services. The ministers of trade were requested to submit tariff concessions at the next AU meeting in July 2019 and the commitments for trade in services in February 2020. The draft protocols on investment, competition and on intellectual property rights are expected to be tabled in January 2021.As the saying goes: governments do not trade, but the private sector does. Therefore, there is a need for much closer involvement of the private sector in regional and continental economic integration. We can perhaps learn a lesson from the Association of Southeast Asian Nations (ASEAN) experience. The ASEAN member states have established a business advisory council that reports directly to the committee of economic ministers, as well as to the heads of state at the annual meetings, reflecting the importance ASEAN attaches to the role of the private sector.Furthermore, as Namibia diversifies its trade patterns and opens its markets to more countries, there is a need to strengthen the institutional framework.Substantial progress has been made with the establishment of the Namibian Board of Trade that will deal among others with trade tariffs, safeguard issues and rebates for specific industries. Currently, only South Africa has an active Board of Trade – the International Trade Administration Commission. In particular, the South African automobile industry benefits substantially from rebates from the SACU common revenue pool. A lean, efficient Namibian Board of Trade would ensure that the playing field would be more levelled, which could help Namibia attracting additional investment. And it would be a stepping stone towards the establishment of a SACU Board of Trade as envisaged in the 2002 SACU Agreement, which would provide the smaller SACU economies with a stronger voice in setting the common external tariff.

AfCFTA coming into force: What’s next?

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Republikein 2025-10-14

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AfCFTA coming into force: What’s next?

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