AfCFTA January 2026 Update: Progress and Tough Road Ahead

By Mark-Anthony Johnson

The African Continental Free Trade Area (AfCFTA) was supposed to revolutionize African commerce. Five years after trading officially commenced, the world’s largest free trade area by participating countries is finally showing signs of moving from aspiration to operational reality – though significant hurdles remain.

As the flagship initiative of the African Union’s Agenda 2063, a 50-year blueprint for inclusive and sustainable development, AfCFTA represents an unprecedented bet on regional integration. The agreement aims to transform intra-African trade by creating a comprehensive framework covering goods, services, investment, intellectual property rights, and competition policy among member states.

If successful, it could unlock economic potential across a continent of 1.3 billion people with a combined GDP exceeding US$3 trillion.

The Progress Report: Grounds for Optimism

The numbers tell a story of gradual but meaningful advancement. As of January 2026, 49 of the 54 African Union members – roughly 90 percent – have deposited their instruments of ratification with the AU Commission.

Only Eritrea remains outside the fold entirely, a diplomatic outlier whose absence speaks volumes about the agreement’s near-universal continental appeal.

More importantly, the operational machinery is beginning to function. By mid-2025, participating nations had issued 8,561 certificates of origin, the critical documents that allow goods to move across borders under preferential AfCFTA terms.

Twenty-four state parties have gazetted their provisional schedules of tariff concessions and can now legally trade under AfCFTA rules. This group includes major economies like Egypt, Nigeria, South Africa, and Kenya, alongside smaller players such as Rwanda, Mauritius, and Botswana – a geographic and economic diversity that bodes well for the agreement’s practical reach.

Technical negotiations have advanced substantially. An impressive 92.4 percent of rules of origin – the complex regulations determining which products qualify for preferential treatment – have been finalized. The remaining sticking points involve textiles, clothing, and automotive products, sectors where competing national industrial strategies have complicated consensus. Negotiators expect to resolve these outstanding issues in 2026.

Beyond Tariffs: Building the Institutional Architecture

AfCFTA’s ambitions extend far beyond simple tariff reduction. The agreement’s phased approach reflects an understanding that genuine economic integration requires deep institutional frameworks.

Phase Two legal instruments, adopted by the AU Assembly in February 2023, brought protocols on competition policy, investment, and intellectual property rights into the agreement’s architecture. These represent the sinews of a functioning common market, addressing the regulatory harmonization necessary for cross-border business to flourish.

Technical negotiations continue on dispute resolution mechanisms for investment protocols – unglamorous but essential work that will determine whether the agreement has real teeth when conflicts arise.

The AU Assembly has also adopted ministerial regulations on special economic zones, enabling goods produced in SEZs to trade under AfCFTA terms. This pragmatic measure acknowledges the continent’s existing patchwork of investment incentive schemes while channeling them toward continental integration.

Phase Three instruments, adopted in 2024, push into emerging frontiers. Protocols on digital trade and women and youth in trade recognize that Africa’s economic future will be shaped by technological connectivity and demographic realities. Eight annexes to the digital trade protocol, adopted in February 2025, provide granular frameworks for e-commerce, data flows, and digital services – areas where Africa has both tremendous opportunity and significant regulatory catching up to do.

Twenty-five state parties have submitted schedules of specific commitments on trade in services, a notoriously difficult area where national sensitivities about professional licensing, financial services, and telecommunications often override integration impulses.

The Implementation Gap: From Paper to Practice

Yet for all this diplomatic progress, a stark reality persists: actual trade flows under AfCFTA remain modest. The gap between signed protocols and transformed supply chains is where continental free trade agreements typically founder, and AfCFTA faces formidable implementation challenges.

Infrastructure deficits constrain what tariff liberalization can achieve. A Kenyan exporter might enjoy preferential access to Nigerian markets on paper, but if transport costs remain prohibitive and border procedures Byzantine, the competitive advantage evaporates.

The agreement cannot, by itself, build the roads, railways, and port facilities that efficient regional trade requires.

Non-tariff barriers pose an even thornier problem. Licensing requirements, product standards, customs procedures, and sanitary regulations – often designed with protectionist intent – can neutralize tariff preferences.

AfCFTA’s institutional mechanisms for addressing these barriers remain underdeveloped, and political will to dismantle them varies considerably across member states.

The industrial policy tension is real. Many African governments pursue manufacturing strategies centered on import substitution and infant industry protection.

These national priorities often conflict directly with the trade liberalization that AfCFTA demands. Reconciling sovereignty over industrial development with commitments to continental integration will require deft political management.

What Success Would Look Like

If AfCFTA can navigate these challenges, the prize is substantial. Economic modeling suggests that full implementation could boost intra-African trade by over 50 percent, lifting millions out of poverty and catalyzing industrial diversification.

African firms could finally achieve the scale necessary to compete globally, leveraging a continental market rather than fragmented national ones.

The agreement could also shift Africa’s position in global value chains. Rather than exporting raw materials to be processed elsewhere, African countries could develop regional manufacturing clusters, capturing more value domestically.

The automotive and textile sectors – precisely those where rules of origin negotiations have proven contentious – represent opportunities for this kind of transformation.

For African consumers, success would mean greater choice, lower prices, and improved quality as competition intensifies and economies of scale emerge. For businesses, it would mean predictable regulatory environments, lower transaction costs, and expanded markets for specialized products.

The Year Ahead

The 2026 agenda is clear: finalize outstanding rules of origin, strengthen dispute resolution mechanisms, and – most critically – translate legal frameworks into actual trade flows. The technical work matters, but political commitment will prove decisive.

African leaders face a choice. They can allow AfCFTA to join the graveyard of ambitious regional integration schemes that foundered on implementation, or they can muster the political courage to subordinate narrow national interests to continental vision.

The agreement’s architecture is largely in place. What remains is the harder work of making it function in practice.

As the certificates of origin accumulate and tariff schedules multiply, there is reason for measured optimism. AfCFTA is no longer merely an aspiration. It is becoming an operational reality, however imperfectly.

Whether it becomes a transformative one depends on choices African governments and businesses make in the months and years ahead. The continent’s most ambitious economic experiment continues. The world should pay attention.

Mark-Anthony Johnson is the founder and CEO of JIC Holdings, a global asset and investment management firm founded in 2009. With over 30 years of experience and strong ties to Africa, his investments span mining, infrastructure, power, shipping, commodities, agriculture, and fisheries. He is currently focused on developing farms across Africa, aiming to position the continent as the world’s breadbasket.