AfCFTA explained: what the African Continental Free Trade Area means for business

For most of the past century, it was often easier for an African company to sell to Europe than to a neighbouring country. Tariffs, paperwork and payment friction between African states were high. The African Continental Free Trade Area (AfCFTA) is the attempt to change that.

What is the AfCFTA?

A trade agreement among African Union member states that creates a single market for goods and services. It was signed in Kigali in March 2018, entered into force on 30 May 2019 once enough countries had ratified, and trading under it officially began on 1 January 2021. The AfCFTA Secretariat is based in Accra.

Every AU member except Eritrea has signed. Most have ratified. A country benefits only once it has ratified, published its tariff schedule and set up the customs procedures.

How do the tariff cuts work?

Phase-outs run from each country's start date, so the rate you pay depends on both countries' schedules.

What are rules of origin?

To get AfCFTA tariff rates, goods must originate in an AfCFTA member. That means they were wholly produced there, or substantially transformed there according to the product-specific rule, for example a minimum share of local value or a change of tariff heading. Simply relabelling goods made elsewhere does not qualify.

Exporters prove origin with an AfCFTA certificate of origin from their country's designated authority, plus a supplier's declaration where inputs came from other members.

Is anyone actually trading under it?

Yes, though volumes are still small. The Guided Trade Initiative, launched in October 2022 with a first group of countries, moved real shipments under AfCFTA terms, such as batteries, tea, coffee and ceramic tiles. More countries and products have joined since.

What about trade in services?

The agreement includes a Protocol on Trade in Services. Members started with five priority sectors: business services, communications, financial services, tourism and transport. For a services company selling across Africa, that is where market access commitments will appear first.

How do payments fit in?

Payment friction has been one of the biggest barriers to intra-African trade. Many payments between African countries have been routed through USD or EUR, with two conversions. The Pan-African Payment and Settlement System (PAPSS), backed by Afreximbank and the AfCFTA Secretariat, lets participating banks settle in local currencies instead. See what PAPSS is.

Getting paid across borders

A company exporting within Africa often invoices in USD, or in the buyer's currency. Rivet opens accounts for registered companies in the countries we support. On Scale, one account holds NGN, KES, GHS, ZAR, XAF and XOF alongside USD and EUR, so a buyer's payment can be held, converted and used to pay suppliers without a round trip through a second bank.