Angola's Trade Future: Acfta Membership Explored

Angola, officially the Republic of Angola, is a country on the west-central coast of Southern Africa. It is a member of the African Union and ratified the African Continental Free Trade Area (AfCFTA) in 2020. The AfCFTA is a free trade area encompassing most of Africa, with the aim of creating a single market for goods, services, and the movement of persons to deepen the economic integration of the African continent. Angola's ratification of the AfCFTA demonstrates its commitment to regional economic cooperation and its recognition of the potential benefits of increased trade and investment within Africa.

Angola ratified the AfCFTA in 2020

Angola is indeed part of the African Continental Free Trade Area (AfCFTA). The AfCFTA is a free trade area that encompasses most of Africa. It was established in 2018 by the African Continental Free Trade Agreement, which has 43 parties and another 11 signatories, making it the largest free-trade area by number of member states, after the World Trade Organization, and the largest in population and geographic size, spanning 1.3 billion people across the world's second-largest continent.

The overall aims of the AfCFTA are to increase socioeconomic development, reduce poverty, and make Africa more competitive in the global economy. The agreement will reduce tariffs among member countries and cover policy areas such as trade facilitation and services, as well as regulatory measures such as sanitary standards and technical barriers to trade. The implementation of the AfCFTA is expected to reshape markets and economies across the region and boost output in the services, manufacturing, and natural resources sectors.

According to the World Bank, the AfCFTA presents a major opportunity for African countries to bring 30 million people out of extreme poverty and to raise the incomes of 68 million others who live on less than $5.50 per day.

AfCFTA aims to create a single market for goods and services

The African Continental Free Trade Area (AfCFTA) is a free trade area that encompasses most of Africa. It was established in 2018 by the African Continental Free Trade Agreement, which has 43 parties and another 11 signatories, making it the largest free-trade area in the world by the number of member states.

The agreement's main objective is to create a single, liberalised market for goods and services, facilitated by the movement of persons. This will be achieved by eliminating tariffs and non-tariff barriers to trade in goods and services over a period of 5, 10, or 13 years, depending on the country's level of development and the nature of the products.

The creation of a single market for goods and services will have far-reaching effects on the African economy. It will reshape markets and economies across the region, boosting output in the services, manufacturing, and natural resources sectors. It will also increase employment opportunities and incomes, helping to expand opportunities for all Africans.

The implementation of AfCFTA will be done in phases. Phase I covers trade in goods and services, while Phase II covers intellectual property rights, investment, and competition policy. Phase III will address e-commerce.

The benefits of AfCFTA for African countries are significant. It is expected to lift around 30 million people out of extreme poverty and boost the incomes of nearly 70 million people living on less than $5.50 per day. It will also increase Africa's exports by $560 billion, mostly in manufacturing, and make African countries more competitive in the global economy.

The agreement will also have a positive impact on gender equality and the empowerment of women and girls on the African continent. It will enable women-led micro, small, and medium-sized enterprises to seize new opportunities, particularly in agriculture.

Overall, the AfCFTA aims to create a single market for goods and services, reduce poverty, and increase socioeconomic development and competitiveness in Africa.

The agreement was brokered by the African Union

The African Continental Free Trade Area (AfCFTA) is a free trade area that encompasses most of Africa. It was established in 2018 by the African Continental Free Trade Agreement, which has 43 parties and another 11 signatories, making it the largest free-trade area in the world by the number of member states, after the World Trade Organization. The agreement was brokered and signed by 44 of the 55 member states of the African Union (AU) in Kigali, Rwanda, on March 21, 2018.

The AU has long been committed to promoting Africa's growth and economic development through increased cooperation and integration of African states. In 2002, the Organization of African Unity (OAU) was succeeded by the AU, which had as one of its primary goals the acceleration of the "economic integration of the continent". The AU aimed to build on the work of the OAU, which was founded in 1963 to promote cooperation between African states.

At the 2012 AU summit in Addis Ababa, leaders agreed to create a new Continental Free Trade Area by 2017. This was followed by the 2015 AU summit in Johannesburg, where leaders agreed to commence negotiations. This kicked off a series of ten negotiating sessions that took place over the next three years. The first negotiation forum was held in February 2016, and eight meetings were held until the Summit in March 2018 in Kigali.

The African Continental Free Trade Agreement was signed at the 10th Extraordinary Session of the African Union on AfCFTA, along with two other agreements: the Kigali Declaration and the Protocol on Free Movement of Persons. The Protocol on Free Movement of Persons seeks to establish a visa-free zone within the AfCFTA countries and support the creation of the African Union Passport.

The agreement founding the AfCFTA entered into force on May 30, 2019, and officially commenced on January 1, 2021. Under the agreement, members are committed to eliminating tariffs on most goods and services over a period of 5, 10, or 13 years, depending on the country's level of development and the nature of the products. The overall aims of the AfCFTA are to increase socioeconomic development, reduce poverty, and make Africa more competitive in the global economy.

AfCFTA entered its operational phase in April 2024

The African Continental Free Trade Area (AfCFTA) entered its operational phase in April 2024. The agreement, which was established in 2018, is a free trade area encompassing most of Africa and is the largest in the world by the number of countries participating, population, and geographic size. It connects 1.3 billion people across 55 countries, with a combined gross domestic product (GDP) of US$3.4 trillion.

The operational phase of the AfCFTA is characterised by the following actions:

• Establishment of the rules of origin, which govern the conditions under which products and services can be traded duty-free across the region.
• Tariff concessions, with an agreement to achieve 90% tariff liberalisation.
• An online mechanism that allows member states to report non-tariff barriers, such as poor infrastructure or administrative issues.
• The Pan-African Payment and Settlement System, which allows payments between companies operating in Africa to be made in any local currency, ensuring certainty and confidence in the system.
• The African Trade Observatory, a portal provided by AU member states to address hindrances to trade, such as a lack of information about trade statistics, exporters, and importers.

The AfCFTA has the potential to bring significant benefits to Africa. It is expected to increase trade among African countries, stimulate production through the development of regional value chains, and strengthen the capacities of African companies in global markets. The agreement also aims to reduce tariffs among member countries and cover policy areas such as trade facilitation, services, and regulatory measures.

Angola ratified the AfCFTA agreement in October 2020.

Angola is a member of the Southern African Development Community

The origins of the SADC can be traced back to the 1960s and 1970s, when the leaders of majority-ruled countries and national liberation movements coordinated their efforts to end colonial and white-minority rule in southern Africa. The Southern African Development Coordination Conference (SADCC), formed in 1980, was the forerunner of the socio-economic cooperation leg of today's SADC.

In 1992, the SADCC was transformed into the SADC, with the adoption of the Windhoek Declaration and Treaty by the founding members of SADCC and newly independent Namibia. The SADC provided for both socio-economic cooperation and political and security cooperation.

Angola's membership in the SADC is significant as it works towards regional integration and cooperation. However, it is important to note that Angola is not yet a participant in the SADC Free Trade Area, established in 2008. The SADC Free Trade Area aims to promote free trade and the movement of people among its members. As of 2019, Angola's trade minister, Joffre Van-Dúnen Júnior, stated that the country was working towards creating the conditions for its accession to the SADC Free Trade Area.

In addition to its membership in the SADC, Angola has also ratified the African Continental Free Trade Area (AfCFTA) agreement. The AfCFTA aims to create a single market for goods and services, facilitated by the movement of persons, to deepen the economic integration of the African continent. Angola's ratification of the AfCFTA demonstrates its commitment to regional cooperation and economic development.

Frequently asked questions