AfCFTA Expands to 37 Countries in Guided Trade Initiative
The African Continental Free Trade Area's Guided Trade Initiative has grown from 7 countries to 37, with South Africa and Nigeria joining the approved exporters club.
Massive Expansion of Continental Trade
The African Continental Free Trade Area (AfCFTA) has announced a dramatic expansion of its Guided Trade Initiative, growing from the initial 10 pilot countries to 37 participating states. This expansion marks a crucial milestone in Africa's journey toward economic integration and intra-continental trade.
What is the Guided Trade Initiative?
Launched in October 2022, the Guided Trade Initiative serves as a pilot program allowing selected countries to begin trading under preferential AfCFTA terms before full implementation. The initiative focuses on 96 priority products including ceramic tiles, tea, coffee, processed meat products, corn starch, sugar, pasta, glucose syrup, dried fruits, and sisal fiber.
Major Economies Join
The recent expansion includes Africa's two largest economies:
- South Africa: The continent's most industrialized economy brings advanced manufacturing capabilities
- Nigeria: Africa's largest economy by GDP adds significant market depth
Other participating countries include Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia, creating a comprehensive network of trading partners across all African regions.
Trade Volumes and Projections
Current data shows impressive growth:
- Intra-African trade could grow by $22 billion by 2029 if tariffs are fully eliminated
- 48 of 54 African Union member states have ratified the AfCFTA Agreement
- The initiative covers products worth an estimated $3.5 billion in annual trade
Infrastructure Support
The expansion is supported by critical infrastructure developments:
Pan-African Payment and Settlement System (PAPSS)
- Enables cross-border payments in local currencies
- Reduces currency exchange costs
- Facilitates faster transaction processing
E-Tariff Book
- Provides transparent tariff information
- Simplifies customs procedures
- Helps businesses understand their obligations
AfCFTA Adjustment Fund
- Supports countries in adapting to new trade dynamics
- Helps offset short-term revenue losses from tariff reductions
Benefits for Businesses
Companies across Africa can now:
- Access expanded markets with reduced tariffs
- Simplify export documentation through harmonized procedures
- Benefit from rules of origin that encourage value addition
- Participate in regional value chains
Challenges and Solutions
While the expansion is promising, challenges remain:
- Non-tariff barriers: Many countries still maintain regulatory hurdles
- Infrastructure gaps: Poor road and port facilities limit trade flows
- Awareness: Many small businesses are unaware of AfCFTA benefits
Governments and the AfCFTA Secretariat are working to address these through capacity building programs, infrastructure investments, and business outreach initiatives.
Next Steps
The AfCFTA aims to:
- Expand the Guided Trade Initiative to all 54 member states by 2026
- Increase the number of products traded under preferential terms
- Implement the Digital Trade Protocol for e-commerce
- Finalize protocols on Investment, Competition Policy, and Intellectual Property Rights
For African businesses, the message is clear: the continent's single market is becoming a reality, and early adopters stand to gain the most.
