The African Continental Free Trade Area as a Business Case

The African Continental Free Trade Area (AfCFTA), founded in 2020, opens a perspective of liberalized trade in goods and services across the continent. The agreement will also comprise a number of important regulations in adjacent business areas. A sound judgment of the real opportunities for investment and trade is, however, difficult to give because of key unknowns in the economic projections, differentiated and staged tariff liberalization, ongoing negotiations on the rules of origin that have to accompany the new tariff schedule, and wide-spread non-tariff measures running counter to the intended trade liberalization. There will simply not be full free trade in Africa. Concrete prospects for business also depend on the future relationship between the AfCFTA and the existing Regional Economic Communities which will continue to be the main actors for trade agreements with third parties, such as the EU, the USA, or China. There also are essential links to other policy areas without which the AfCFTA cannot succeed.