Source: https://rivet.global/blog/afcfta-explained
Published: 2026-09-27 · Updated: 2026-10-23 · By William Sunjo M.

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

The African Continental Free Trade Area cuts tariffs between members over time. How it works, rules of origin, the Guided Trade Initiative and payments.

## Key takeaways

- The AfCFTA Agreement was signed in Kigali in 2018, entered into force on 30 May 2019, and trading started on 1 January 2021.
- Members commit to removing tariffs on 90% of tariff lines over five years, or ten years for least developed countries.
- Goods only get AfCFTA tariff rates if they meet the rules of origin and carry an AfCFTA certificate of origin.
- The Guided Trade Initiative, launched in 2022, started actual trading under AfCFTA terms among a group of countries.
- The Pan-African Payment and Settlement System lets participating banks settle intra-African payments in local currencies.

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?

| Product category | Share of tariff lines | Phase-out period |
|---|---|---|
| Non-sensitive | 90% | 5 years (10 for least developed countries) |
| Sensitive | 7% | 10 years (13 for least developed countries) |
| Excluded | 3% | Not liberalised |

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](/blog/what-is-papss).

## 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](/accounts).

## Questions

### Which countries are in the AfCFTA?

Every African Union member except Eritrea has signed the agreement, and most have ratified it. A country can only trade under AfCFTA terms once it has ratified and published its tariff schedule.

### Does AfCFTA remove all tariffs?

Not immediately. Tariffs on most goods are phased down over several years, and a small share of sensitive or excluded products keep tariffs longer or permanently.

### How do I prove my goods qualify?

With an AfCFTA certificate of origin issued by your country's designated authority, showing the goods meet the rules of origin for their product category.

### Does AfCFTA cover services?

Yes. The agreement has a protocol on trade in services, starting with priority sectors such as business services, communications, finance, tourism and transport.