Is the AfCFTA the ‘Game Changer’ for Africa?

The AfCFTA aims to create a $3.4 billion economic bloc to foster structural transformation through agricultural upgrading, light manufacturing growth, and the deepening of regional value chains (RVCs). While initial tariff offers show potential for significant gains, the document notes that the liberalisation of services has lagged, with a new deadline of December 2023. Implementation is supported by mechanisms like the Afreximbank Adjustment Fund and the Pan-African Payment and Settlement System, though the authors highlight a critical weakness in accountability: private parties cannot access the AfCFTA's dispute settlement mechanism. The brief concludes that while the project is long-term and potentially 'oversold' to the private sector, it remains a vital instrument for overcoming the limitations of smaller regional economic communities.

• The AfCFTA has the potential to significantly increase continental GDP and reduce poverty by 2035. If tariff liberalisation is combined with the removal of non-tariff barriers (NTBs) and trade facilitation, GDP could rise by 7%, potentially lifting 30 million people out of extreme poverty and increasing wages by approximately 10%.
• Trade costs within Africa are disproportionately high compared to external trade; for instance, the cost of trading between Sub-Saharan Africa and North Africa is 225% higher than the cost of trading between North Africa and Europe.
• The agreement's potential to boost agricultural trade depends heavily on removing NTBs, specifically sanitary and phytosanitary (SPS) measures and trade bans, which could increase trade value by $10–17 billion.
• Progress in the trade in services is lagging behind the trade in goods. Negotiations for services commitments have been delayed to December 2023, meaning the liberalisation of goods and services will not coincide, which may delay the development of regional value chains.
• The automotive sector faces significant hurdles due to the lack of tariff offers for certain product lines, such as cars (HS 8703), which are either sensitive or excluded. This potentially blocks over $1 billion in export potential from Morocco and South Africa to the rest of the continent.
• Several financial and technical mechanisms are in place to ensure implementation, including the Afreximbank Adjustment Fund (with an initial $1 billion commitment and a goal of $8 billion) and the Pan-African Payment and Settlement System (PAPSS), which could save over $5 billion annually.
• A major weakness in the AfCFTA's accountability framework is that the dispute settlement mechanism is restricted to state parties, meaning private businesses cannot directly hold governments accountable for implementation commitments.

APA

CHARALAMBIDES, N., & CAPON, C. (2022). Is the AfCFTA the ‘Game Changer’ for Africa? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2022/10/SAIIA_PI_138_Is-the-AFCFTA.pdf

Chicago

CHARALAMBIDES, NICK, and CHAD CAPON. Is the AfCFTA the ‘Game Changer’ for Africa? South African Institute of International Affairs, 2022. https://saiia.org.za/wp-content/uploads/2022/10/SAIIA_PI_138_Is-the-AFCFTA.pdf.

Wikipedia

{{cite report |last1=CHARALAMBIDES |first1=NICK |last2=CAPON |first2=CHAD |title=Is the AfCFTA the ‘Game Changer’ for Africa? |publisher=South African Institute of International Affairs |date=September 2022 |url=https://saiia.org.za/wp-content/uploads/2022/10/SAIIA_PI_138_Is-the-AFCFTA.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{charalambides2022afcfta, author = {CHARALAMBIDES, NICK and CAPON, CHAD}, title = {{Is the AfCFTA the ‘Game Changer’ for Africa?}}, institution = {South African Institute of International Affairs}, year = {2022}, month = sep, url = {https://saiia.org.za/wp-content/uploads/2022/10/SAIIA_PI_138_Is-the-AFCFTA.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }