AfCTFA: What it means for companies with an appetite to investVisit our press officeThe African Continental Free Trade Agreement establishes a continent-wide market embracing 54 African countries, creating the world's largest free trade area. The agreement addresses tariff reduction, trade facilitation and regulatory measures.
In October 2022, the Guided Trade Initiative was introduced, enabling partial free trade among nations meeting minimum AfCFTA requirements. Prior to its launch, in September, Kenya and Rwanda exported their inaugural AfCFTA goods to Ghana, featuring Exide batteries and premium coffee, marking a significant step in the initiative's implementation.
. This centralised system facilitates instant cross-border payments in over 40 African currencies, reducing reliance on foreign currencies like the US dollar. It has major implications for financial services on the continent and benefits small and medium-sized enterprises by easing access to hard currency, fostering trust and streamlining cross-border trade.
The urgency of addressing this deficit is particularly visible in Egypt, where the rate of construction is reminiscent of development in the United Arab Emirates 20 years ago. Heavy investment in the country’s ports and ancillary infrastructure intends to maximise Egypt’s capabilities as an export hub from Africa to the rest of the world. Policy redevelopment to support this aim is also well under way.
And, with the global rise in environmental, social and governance reporting requirements and the AfCFTA’s clear intent to address long-standing socio-economic problems on the continent, managing, monitoring and reporting on ESG impacts will also be important.