THE AFRICAN CONTINENTAL FREE TRADE AREA AND WHAT IT MEANS FOR ZIMBABWE.

On 30 May 2019, the African Continental Free Trade Area (AfCFTA) came into operation. What is AfCFTA and how will it affect Zimbabwe? This paper seeks to give a brief on what AfCFTA is and how Zimbabwe will be affected by it. It does not purport to be an Economics paper but merely a legal opinion.

The AfCFTA was birthed at the 18th Ordinary session of the Heads of State and Government of the African Union in Addis Ababa in January 2012[1], The motivation behind the idea being the establishment of a Free Trade Area by 2017 or in other words “to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave way for the accelerating the establishment of the Customs Union.”[2] The original deadline was not met but there has been significant progress towards that target in recent months, as highlighted by the development on 30 May 2019.

On 21 March 2018, the AU leadership held an extraordinary summit in Kigali, Rwanda, where 4 out of the 55 AU member states signed the Agreement, though Africa’s biggest economy Nigeria was notably absent. The Agreement states that it enters into force 30 days after the 22nd instrument of ratification is deposited with the AU Chair, and this happened following the deposit of instruments of ratification by Sierra Leone and Saharawi Republic on 29 April 2019. Zimbabwe signed the Agreement on 29 April 2019, and later ratified the Agreement on 24 May 2019 becoming the 23rd country to do so.[3]

What exactly is AfCFTA and what is its intended purpose?

AfCFTA is a Free Trade Agreement (FTA) which goes beyond the normal scope of an FTA in covering trade in goods and services because once the whole Agreement enters into force it will also cover trade in goods, trade in services, dispute settlement, competition, investment and intellectual property rights.[4] An FTA by definition is a treaty or international agreement between two or more countries to establish an area where commerce in goods and services can be conducted across their common borders without tariffs or hindrances. Member countries impose a common external tariff (uniform tariff) on trade with non-member countries.[5]

The AfCFTA is structured in such a way that it consists of the main AfCFTA Agreement coupled with additional sub-agreements or legal instruments, namely, Protocols on Trade in Goods; Trade in Services; Investment; Intellectual Property Rights; Competition Policy; Procedural Rules on Dispute Settlement and their annexes and appendices. It must be stated that at this stage what has been agreed on is the main agreement and the Protocols will hereafter be agreed upon by AU members. It is expected that the whole agreement should be fully operational by 2030.[6]

The AfCFTA is quite an ambitious project given the fact that if fully implemented it stands to create the world’s largest free trading zone covering over 1.2 billion people and with a GDP of US$2.5 trillion.[7] Its intended objectives are the elimination of tariffs and non-tariff barriers to intra-Africa trade; the progressive liberalisation of trade in services; cooperation on investment, intellectual property rights and competition policy; cooperation on all trade related issues; and the settlement of disputes among others[8] It is hoped that AfCFTA will expand intra-African trade through better harmonisation and coordination of trade liberalisation and facilitation. There is also an expectation that it will enhance competitiveness at the industry and enterprise level through increased production, opportunities to explore previously inaccessible markets and a better reallocation of resources.[9]

Now what is the next stage?

The main AfCFTA Agreement is still being ratified, and as of 30 May 2019, the required 22 members which enable it to come into force had ratified the Agreement, of note being huge economies like South Africa and Egypt. Nigeria is yet to sign the Agreement. It must be spelt out that the act of ratification is different from the act of signing the Agreement. Ratification is an international act whereby sovereign states establish on the international plane their consent to be bound by an international agreement.[10] This act indicates that as parties to the Agreement, they accept and will implement the obligations agreed upon. However, the act of ratification does not create legally binding obligations for a respective state as the agreement must then enter into force when the required number of signatures needed to ratify it have been obtained, and in the case with the AfCFTA, 22 signatures of ratification meant that the Agreement entered into force on 3O May 2019.

The next stage is the negotiation of Phase I Protocols (including their annexes and appendices) which will have to be adopted fully by AU members, that is the Agreement establishing the African Continental Free Trade Area, its Protocols, Annexes and Appendices.[11] The following Protocols will also take the same route as the main Agreement, that is requiring 22 signatures of ratification and entering into force 30 days after the 22nd ratification.[12]

Zimbabwe and AfCFTA

Zimbabwe as a member of the African Union signed the Agreement on 29 April 2019 and ratified the Agreement on 24 May 2019. What this means for Zimbabwe is it has consented to be bound on the international plane or in other words, agreeing to implement the obligations set out in the AfCFTA Agreement. Zimbabwe follows a dualist system in that it views international law as separate from municipal law, hence international agreements are not automatically binding on Zimbabwe but first have to be domesticated or translated into domestic law. In terms of the Constitution, the President has the power to enter into treaties with foreign states, governments and international organisations.[13] However, such a treaty does not bind Zimbabwe until it has been approved by Parliament and incorporated into law through an Act of Parliament.[14] Consequently, like many other African countries, the AfCFTA Agreement will, upon completion of the ratification process, still need to be approved by Parliament, and subsequently incorporated into law through an Act of Parliament.

It will be interesting to see how the AfCFTA Agreement will be implemented in Zimbabwe, especially in light of the fact that the country, like so many other African countries, is heavily reliant on tariffs as a source of revenue, due to the economic challenges facing the country. With virtually little industry to speak of, Zimbabwe will face a huge challenge as a hallmark feature of the AfCFTA seeks boost intra-Africa trade by immediately removing 90% tariffs on goods and the remaining 10% being removed gradually. The benefits of this move for Africa as a whole are obvious as the United Nations estimates that if fully implemented, AfCFTA will boost intra-African trade by 52.3% by 2022. At the moment, intra-African trade stands at a dismal 18% in comparison with 69 % for Europe and 59% for Asia.[15] Zimbabwe will have to move quickly to make itself competitive in exporting manufactured goods instead of raw materials as it has been shown that when Africans trade amongst themselves they exchange more manufactured goods and create more value, with manufactured goods accounting for more of regional exports at 41.9 % than those leaving the continent 14.8% [16] The need to export manufactured as opposed to raw materials has been damaging not only to Zimbabwe’s economy but that of many African countries about 70% of whose exports are raw materials which are subject to frequent price fluctuations on international markets, and as has been noted, failure to ratify the AfCFTA agreement could be damaging to Zimbabwe where 60% of export revenue is reliant on mineral commodities.[17] Industrialisation certainly needs a rebirth in Zimbabwe. It will also be interesting to see how the new thrust of US and British trade policy of regionalism as opposed to multilateralism influences the AfCFTA Agreement, as is the “trade war” between the USA and China.

Kudzanai Kapurura

LLM Candidate in International Economic Law (University of South Africa)

LLB (Hons) University of Zimbabwe

Professional Assistant

Gutu and Chikowero Attorneys-at-Law

This article is made available by the author and publisher of this blog site for educational purposes only as well as to give you a general information and a general understanding of the law but not to provide specific legal advice. By using this blog site you understand that there is no attorney-client relationship as that can only be established upon agreement with the author of this article.


[1] https://www.tralac.org/resources/by-region/cfta.html

[2] https://au.int/en/ti/cfta/about

[3] Ibid 1

[4] Erasmus, G 2019 :  Ratification of the AfCFTA Agreement : What happens next ? Working Paper No. S19WPO2/2019.Stellenbosch :tralac

[5] http://www.businessdictionary.com/definition/free-trade-agreement.html

[6] Prinesha Naidoo; What Trade War? Africa Sidesteps Tariffs, Starts Free-Trade Pact; Bloomberg

[7] https://www.trademarkea.com/news/eac-news/the-afcta-lessons-from-the-free-trade-area-of-the-americas/

[8] Article 4 of AfCFTA Agreement

[9] Ibid 1

[10] Article 2(1) of the Vienna Convention on the Law of Treaties (1960)

[11] Article 22 AfCFTA Agreement

[12] Article 23 (2) of AfCFTA Agreement

[13] Section 110 (4) of Constitution of Zimbabwe Amendment (No 20)

[14] Section 327 (2) ibid

[15] Songwe V ; Intra-African Trade : A path to economic diversification and inclusion ; https ://www.brookings.edu/research/intra-african-trade-a-path-to-economic-diversification-and-inclusion/ accessed on 3 June 2019

[16] Songwe V ; Intra-African Trade : A path to economic diversification and inclusion ; https ://www.brookings.edu/research/intra-african-trade-a-path-to-economic-diversification-and-inclusion/ accessed on 3 June 2019

[17] Hammond A. C. R ; Benefits of the AfCFTA – Africa’s Gateway Agreement to Economic Prosperity.

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