Tracing the Journey: A Historical Overview of the Establishment of AfCFTA
By Frida Frans
The search for a viable path to socio-economic development has underpinned the various efforts geared towards Regional Integration in Africa. Indeed, since the early 1960s through to the dawn of the twenty first century, political and bureaucratic elites in Africa such as Kwame Nkrumah of Ghana, Nnamdi Azikwe, Obafemi Awolowo, Adebayo Adedeji of Nigeria, Thabo Mbeki of South Africa, among others, have identified and championed the imperative of regional approach to restructuring the political economy of Africa.
Over the past decades, Africa has implemented various programs and strategies at both regional and continental levels to achieve a unified and integrated continent. Regional Economic Communities (RECs), consisting of eight recognised organisations, have been established to enhance interactions, trade, and investment among African nations. The Lagos Plan of Action and the Final Act of Lagos, developed in 1980, focused on socio-economic development, self-reliance, industrialization, and regional integration. Moreover, initiatives such as the New Economic Partnership for African Development (NEPAD) launched in 2001 and the Constitutive Act of the African Union in 2002 emphasized regional integration as pivotal to Africa's socio-economic transformation and renaissance. The African Continental Free Trade Area (AfCFTA) stands as a significant milestone in Africa's regional integration journey, tracing its roots back to the Abuja Treaty. These efforts highlight Africa's recognition of regional integration as a viable framework to address developmental challenges, foster unity, and promote social harmony.
Presently, the African Union, responsible for overseeing 54 member states, actively advocates for the implementation of policies and legal frameworks to combat poverty and inequality. These initiatives aim to empower youth, women, and small and medium-sized enterprises (SMEs) economically, both at the national and regional levels. The African Union's declaration of 2023 as the "Year of AfCFTA" and their emphasis on expediting the AfCFTA's implementation exemplify their commitment to inclusive and sustainable development in Africa.
The establishment of the AfCFTA holds great significance in the 21st century. In 2012, the African Union adopted the Action Plan on Boosting Intra-African Trade (BIAT), which identified seven areas of action. Trade policy emerged as a critical challenge, including the absence of a continental framework for intra-regional trade facilitation, high tariffs between African Union member states, overlapping membership in RECs, and limited export diversity. In response, the AU Heads of State and Government adopted Agenda 2063: The Africa We Want during their 24th Ordinary Assembly in January 2015. This shared framework envisions inclusive growth and sustainable development in Africa over the next fifty years, with the AfCFTA serving as a flagship project to significantly enhance intra-African trade and leverage it as a driving force for growth and development. The specific target is to double intra-Africa trade by 2022 through comprehensive and resolute measures addressing persistent challenges.
The original vision outlined in the Abuja Treaty anticipated that Regional Economic Communities (RECs) would achieve economic integration and establish customs unions by 2017. However, this goal was not fully realised. As a response to this shortfall, the African Continental Free Trade Area (AfCFTA) was conceived with the purpose of consolidating existing Free Trade Agreements (FTAs) into a unified Pan-African FTA.
Nevertheless, it's important to note that the AfCFTA is not the culmination of efforts but rather the beginning of a journey. Currently, negotiations have been concluded on trade in goods and services, as well as the settlement of disputes. The ongoing second phase of negotiations focuses on investment, competition policy, intellectual property rights, and e-commerce. The extensive scope of the AfCFTA negotiations, which goes beyond traditional World Trade Organisation (WTO) issues, indicates that the agreement transcends being a mere trade agreement. It is deeply rooted in the concept of regional development and holds the potential to deliver broader benefits.
In view of the main target groups (women, SMEs, and youth) towards AfCFTA implementation
The Agreement establishing the AfCFTA acknowledges the importance of enhancing the export capacity of both formal and informal service providers, with a specific focus on micro, small, and medium-sized enterprises that actively involve women and youth. It is essential to highlight that the African Continental Free Trade Area (AfCFTA) is more than just a trade agreement. This is a development tool aimed at lifting 100 million Africans, including women and youth, out of poverty by 2035. Considering that Africa is the youngest continent, the AfCFTA holds significant potential for their economic advancement and also presents a chance to harness the talents of young Africans and women, so as to enable inclusive benefits. With the 2023 theme, expectations are set high, as it aligns with the broader business opportunities for women-led enterprises. This will unlock the potential for African women to expand their businesses from small-scale to large-scale operations.
AFCFTA protocol on Women in Trade in the AfCFTA – what could the Protocol provide?
The African Continental Free Trade Area (AfCFTA) seeks to integrate informal and micro/small enterprises into continental markets by eliminating barriers they face when entering advanced regional and international markets. This initiative is particularly significant for women, who make up 70% of informal cross-border trade in Africa. With the AfCFTA, women will gain improved access to regional export destinations, enabling them to expand their businesses into overseas markets.
The AfCFTA achieves this by reducing tariffs and simplifying trading regulations for small traders, making it more cost-effective for informal traders to operate through formal channels. This helps protect women involved in cross-border trade from vulnerabilities such as harassment, violence, confiscation of goods, and imprisonment. Additionally, efforts are being made to address data collection challenges, ensuring that women's trading activities are accurately captured in national accounting systems and regional statistical databases.
The overarching goal of the AfCFTA is to enhance competitiveness, promote industrial development through the diversification and growth of regional value chains, and drive sustainable socio-economic growth and structural transformation. Small and medium-sized enterprises will benefit from improved access to supply inputs, enabling them to contribute to larger regional companies that export to global markets. For example, specific initiatives are being implemented to connect female agricultural workers with opportunities to export food products to international markets, providing significant benefits to women in the process.
Africa is making significant strides towards achieving Aspiration 6 of Agenda 2063, which focuses on a people-driven continent that harnesses the potential of African women and youth while prioritising children's well-being. These efforts are being carried out in conjunction with the African Union's initiatives to enhance science and technology skills, develop the blue economy, improve infrastructure, and promote manufacturing and high-growth sectors.
Aspiration 6 serves as a foundation for the economic empowerment of African women, ensuring their full participation and ownership of businesses across all domains. This empowerment not only contributes to innovation and entrepreneurship initiatives but also aligns with the African Union Strategy for Gender Equality and Women's Empowerment (GEWE). GEWE emphasises the need for women's economic empowerment, particularly under Pillar one (I), which focuses on maximising economic outcomes and opportunities.
As negotiations on the African Continental Free Trade Area (AfCFTA) continue, it is expected that key issues related to seamless trading will be addressed. This includes e-commerce negotiations that cover operational aspects and the utilisation of digital tools, such as data protection, cross-border data flows, cybercrime laws, and taxation of cross-border e-commerce. While the AfCFTA is a continental agreement, its implementation will primarily take place at the national level, requiring contextualization to domestic realities. Women's needs and leadership in these negotiations are crucial for achieving gender equality and inclusion objectives.
The African Continental Free Trade Area (AfCFTA) serves as a catalyst for women's empowerment, particularly following the Declaration of the years 2020 to 2030 as the new Decade of Women's Financial and Economic Inclusion. This declaration reaffirmed the commitment of African leaders to enhance gender inclusion for sustainable development at the national, regional, and continental levels.
To fully harness the exponential potential of women in Africa, it is essential to implement purposeful gender-sensitive economic policies, establish a conducive business environment, and demonstrate political commitment to gender mainstreaming in AfCFTA National Strategies. Additionally, addressing the aspect of financial inclusion is crucial. Many women are currently excluded from the formal financial sector due to factors such as income level, volatility, location, type of activity, or level of financial literacy. Strengthening financial services and providing capacity building opportunities will ensure that women can benefit from improved access to financial resources and support.
In conclusion, it is crucial for young people, SMEs, and women to actively engage and advocate for their interests to drive the agenda and exert pressure on policymakers. Despite being a continental agreement, the successful implementation of the AfCFTA largely depends on actions taken at the national level. The true measure of progress lies not only in the endorsement of protocols in Addis Ababa or Ghana but also in the concrete actions and commitments made by individual states.
Frida Frans is a Namibian Regional integration expert, she holds a master’s degree in Governance and Regional Integration from the Pan African University in Cameroon.