Background

The African Continental Free Trade Area (AfCFTA) Agreement’s objective of creating a single African market presents a logical next step of promoting the market for local and foreign investment. One of the successfully negotiated protocols focuses on supporting, promoting, and facilitating investment within Africa. If implemented correctly, the Investment Protocol can also enhance Africa's business climate and make the free trade area more appealing to foreign direct investment.

The AfCFTA seeks to increase intra-African trade, drive industrial growth and grow prosperity on the continent. Eliminating a majority of the tariffs on goods and services on its own is not enough to significantly increase intra-African trade. Reducing the infamous non-tariff barriers will have a greater impact, provided there are enough made-in-Africa goods to trade. Most African countries produce and export commodities such as peanuts, copper or crude oil. Scaling up production in more complex goods will require both foreign and domestic investment in African economies. These investments will not only bring in much needed capital, but can also help with knowledge and capabilities.

Most AfCFTA member states have extensive experience with investment promotion on the national level. The African Union recognised Regional Economic Communities (RECs) that serve as building blocks for the AfCFTA have also made attempts at coordinating investment promotion at the regional level. At least one, the Common Market for East and Southern Africa (COMESA) has a formal structure in place in the form of a Regional Investment Agency (COMESA RIA).

Working to coordinate these national and regional investment promotion efforts under the umbrella of the AfCFTA will require in-depth studies on what has worked well in the past. This will inform key policy decisions on how to drive pan-African cooperation in investment promotion. The AfCFTA’s investment protocol serves as a launching pad for these discussions as it provides for the creation of a Pan-African Investment Agency.

APRI – Africa Policy Research Institute is convening experts to discuss the following key question among others: