AfCFTA Execution 2026: From Tariff Schedules to Settled Trades

From entry into force to operational trading #

The African Continental Free Trade Area Agreement entered into force on 30 May 2019 and trading under preferences began on 1 January 2021. Six years on, 47 of the 54 signatories have deposited instruments of ratification, the Secretariat in Accra is fully staffed, and the institutional architecture covering the Council of Ministers, the Committee of Senior Trade Officials, and the Dispute Settlement Body is functional. The agreement is structured as a framework with protocols on trade in goods, trade in services, dispute settlement, investment, intellectual property, competition policy, digital trade, and women and youth in trade. Phase 1 covered goods, services, and dispute settlement. Phase 2 added investment, intellectual property, and competition. Phase 3 added digital trade, with the Protocol adopted in February 2024.

The political achievement is not in dispute. The execution challenge in 2026 is converting a fully ratified legal text into settled commercial flows. That requires three things to work together: a Schedule of Tariff Concessions that importers can actually use at the border, rules of origin that customs administrations apply consistently, and a payments rail that lets a Cairo exporter invoice a Lagos importer in Egyptian pounds and Nigerian naira without routing through New York. All three exist on paper. The 2026 question is how fast they scale on the ground.

The Schedule of Tariff Concessions #

Annex 1 of the Protocol on Trade in Goods sets the headline liberalization architecture. Member states liberalize 90 percent of tariff lines to zero over a phased schedule, 7 percent of lines designated as sensitive over a longer 13 year window, and 3 percent excluded entirely. Non-least developed countries phase the 90 percent over 10 years from the start of trading, while least developed countries take 13 years on the same bucket. Sensitive lines run 13 years for non-LDCs and 15 years for LDCs. The 3 percent exclusion list is capped at no more than 10 percent of intra-African import value, a discipline designed to prevent members from sheltering their largest existing trade flows.

By the start of 2026, the State Parties trading under preferences have deposited 90 percent or more of their tariff schedules with the Secretariat, and the Common Tariff Architecture for Phase 1 cleared its final outstanding lines through the 2024 Council decisions. The five Regional Economic Communities recognized as building blocs, COMESA, EAC, SACU, ECCAS, and ECOWAS, continue to operate their own preferential regimes inside the wider AfCFTA frame. The Agreement explicitly preserves deeper RECs preferences where they exceed AfCFTA commitments, which means an EAC origin good moves under EAC rules into Kenya and under AfCFTA rules into Egypt or Morocco.

Guided Trade Initiative: Phase 1 to Phase 2 #

The Guided Trade Initiative launched in October 2022 with eight pilot countries: Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia. The pilot focused on a curated list of 96 products, including ceramic tiles, processed coffee and tea, sugar, dried fruits, refined palm oil, plastics, pharmaceuticals, and selected manufactured items. The intent was to demonstrate end to end execution under the AfCFTA preferential regime: certificate of origin, customs clearance, payment, and post-clearance reconciliation. Volumes were small by design, in the low tens of millions of dollars in cumulative shipments, but the initiative produced the first hard evidence that the regime functioned at the operational level.

Phase 2 expansions through 2025 widened the GTI roster to roughly two dozen State Parties and introduced services trade pilots covering business services, communication, financial, tourism, and transport. The product list broadened to several hundred lines, with a deliberate tilt toward agro-processing, light manufacturing, and pharmaceuticals to test the rules of origin transformation criteria. The Secretariat's reporting through 2025 indicates that customs delays at first crossings, certificate of origin processing times, and currency settlement frictions remain the binding constraints, not the legal preferences themselves.

Rules of origin: the manufactured goods file #

Annex 2 of the Protocol on Trade in Goods governs origin determination. By 2024 negotiators had cleared roughly 87.7 percent of tariff lines on rules of origin, but the residual lines, concentrated in textiles and clothing, automotive components, sugar, and certain processed foods, were politically the hardest. The breakthrough came at the Council of Ministers in early 2024 with agreement on the manufactured goods file, including textile rules requiring a yarn forward or fabric forward transformation depending on the product, and automotive rules requiring a regional value content threshold combined with specified manufacturing operations.

The economic logic of the textile rules is to push regional yarn and fabric capacity, anchored on Egyptian and Ethiopian spinning, into integrated value chains rather than allowing finished garments assembled from imported Asian fabric to claim AfCFTA origin. The automotive rules similarly favor original equipment manufacturers willing to deepen local content in Morocco, South Africa, Egypt, and the emerging assembly nodes in Ghana and Kenya. Pharmaceutical rules of origin are calibrated to support the African Medicines Agency framework. Implementation in 2026 depends on customs administrations accepting digital certificates of origin. The Secretariat has rolled out a centralized e-Tariff Book and is piloting a digital certificate of origin platform with selected RECs, but national customs systems range from advanced (South Africa, Mauritius, Rwanda, Egypt) to under-resourced. Without a working digital chain, certificates remain paper and the sensitive lines go untraded under preferences.

PAPSS and the payments rail #

The Pan-African Payment and Settlement System launched commercially in January 2022, developed by Afreximbank in partnership with the AfCFTA Secretariat and operated on the Mansa platform. PAPSS is a centralized payment infrastructure that allows instant cross-border payments in local African currencies, with net settlement through participating central banks. By the end of 2025, more than sixteen central banks had integrated, including those of Nigeria, Ghana, Kenya, Egypt, Tunisia, Zambia, Zimbabwe, Djibouti, Liberia, Sierra Leone, Guinea, The Gambia, Cabo Verde, Comoros, Malawi, and Rwanda, alongside several others in active integration. Participating commercial banks number more than 150, with significant uptake among Tier 1 institutions in West and East Africa.

The strategic value is the elimination of the dollar correspondent banking leg for routine intra-African transactions. A Kenyan importer paying an Egyptian exporter previously routed Kenyan shillings through a New York correspondent into United States dollars and back into Egyptian pounds, paying spreads on both legs and waiting two to three days for settlement. PAPSS routes the transaction through Mansa with central bank net settlement in roughly 120 seconds, denominated in local currency at each leg. The cost reduction on a typical 50,000 dollar invoice runs from roughly 200 dollars in correspondent fees and FX spread to under 30 dollars on PAPSS rails.

The 2026 roadmap expands PAPSS to commodity finance, remittance corridors, and capital market settlement. Egypt's manufacturing exports to ECOWAS, particularly to Ghana, Cote d'Ivoire, and Senegal, have been an early high-volume corridor, with Egyptian banks reporting meaningful PAPSS settlement volumes for textile, pharmaceutical, and processed food shipments. The harder lift is liquidity provisioning in thinner currency pairs, and Afreximbank's Trade Finance Facility has stepped in as the primary backstop.

The infrastructure spine and project finance #

Trade preferences are necessary but not sufficient. The intra-African trade share has hovered between 14 and 16 percent of total African trade since 2018, against a European Union internal trade share above 60 percent, an ASEAN share near 25 percent, and a Mercosur share near 13 percent. The arithmetic gap is dominated by infrastructure: ports, road and rail corridors, power transmission, and digital backbone. Three flagship projects anchor the 2026 to 2028 capital expenditure pipeline. The Lobito Corridor, refurbishing the rail link from the Angolan port of Lobito through the Democratic Republic of the Congo to Zambia, secured 553 million dollars in G7 backed financing in the Memorandum of Understanding announced at the 2023 G20, with the United States, the European Union, and the African Development Bank as lead sponsors. The Morocco Nigeria Gas Pipeline, a 5,660 kilometer project also known as the African Atlantic Gas Pipeline, would extend the existing West African Gas Pipeline northward through 13 ECOWAS coastal states and Mauritania to Morocco and on to Europe, with feasibility and front end engineering work progressing through 2025.

The African Trade Insurance Agency, now branded ATIDI, plays the role of multilateral political risk and credit insurer. Underwriting capacity exceeded 8 billion dollars by end 2024 across non-honoring of sovereign obligations, breach of contract, expropriation, and trade credit lines. ATIDI cover is increasingly the missing piece for syndicated lenders financing AfCFTA aligned projects in lower rated jurisdictions. The AfCFTA Adjustment Fund, hosted by Afreximbank, targets 10 billion dollars in capitalization to cushion State Parties against tariff revenue losses, balance of payments stress, and supply chain disruption during the liberalization phase-in. The Fund operates three windows: a Base Fund for general adjustment support, a General Fund for project finance aligned with AfCFTA value chains, and a Credit Fund for trade finance. Disbursement through 2025 has been deliberate rather than rapid.

Big three competition and the unfinished services file #

The competitive dynamic that will shape 2026 to 2028 is the triangulation between South Africa, Egypt, and Morocco. South Africa exports machinery, autos, processed foods, and financial services across SADC and increasingly into East Africa, with a deep banking and logistics platform anchored on Standard Bank, Absa, FirstRand, and the Imperial and Bidvest networks. Egypt has positioned itself as the manufacturing exporter to West Africa, with cement, steel, pharmaceuticals, processed foods, and textiles shipped through Alexandria and Damietta into ECOWAS markets, increasingly settled through PAPSS. Morocco anchors the automotive cluster around Tangier, leverages OCP fertilizer flows into West African agriculture, and uses the planned Atlantic gas pipeline as a strategic infrastructure play.

Nigeria, which on paper would be the natural fourth pillar, has lagged on services Protocol implementation. The country ratified the AfCFTA Agreement in 2020 after a delayed signing, and Phase 1 goods schedules are deposited, but the Schedule of Specific Commitments on services has been slower to finalize across the five priority sectors of business, communication, financial, tourism, and transport. The gap matters because Nigerian banks, insurers, and telecoms are precisely the kind of services exporters that would benefit most from cross-border preferences in ECOWAS and beyond. Until Abuja completes its services schedules, Nigerian firms operate under WTO terms or REC level frameworks, leaving a 200 million plus consumer market under-leveraged in the AfCFTA construct.

The Phase 2 and Phase 3 protocols on investment, intellectual property, competition, and digital trade, together with the Protocol on Women and Youth in Trade adopted in 2024, will define the next phase of the integration project. Implementation will be uneven, services schedules will lag goods schedules, and PAPSS volumes will scale faster than the rules of origin paperwork chain. The actionable 2026 variables are the pace of digital certificate of origin rollout, the next wave of central bank PAPSS integrations, AfCFTA Adjustment Fund disbursement velocity, and whether the Lobito and Morocco Nigeria projects move from financing announcements to construction milestones. Intra-African trade rising from 15 to 25 percent of African trade by 2030 is a credible trajectory only if those four execution variables track.

Sources #

• AfCFTA Secretariat
• African Union Commission, AfCFTA Agreement and Protocols
• UNECA, ARIA and AfCFTA reports
• African Development Bank, Africa Economic Outlook
• World Bank, AfCFTA economic and distributional effects
• Afreximbank and PAPSS
• African Trade and Investment Development Insurance, ATIDI
• UN Comtrade database
• Brookings Africa Growth Initiative on AfCFTA
• Financial Times Africa coverage