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AfCFTA Investment Landscape

The AfCFTA Protocol on Investment, adopted by the Assembly of the Heads of State in February 2023, provides a transparent framework for investment regulation on the African continent.  It was inspired by: 1)  best practices incorporated in the Pan-African Investment Code; 2) investment instruments on the continent; 3) the Investment Policy Framework for Sustainable Development of the United Nations Conference on Trade and Development (UNCTAD); and 4) other relevant instruments that support a new generation of investment policies for inclusive growth and sustainable development.

The Protocol’s objectives include, among other things, the promotion, facilitation, protection, and retention of investments that foster sustainable development.  The Protocol also seeks to promote coordinated positions and cooperation on matters of investment on the African Continent.

Prior to AfCFTA, understanding the legal regime for investment in Africa’s various countries and Regional Economic Communities (RECs) was highly complex.  There were different investment laws and policies for all 54 signatories to the AfCFTA Agreement as well as regional investment codes and agreements among members of the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of West African States (ECOWAS), the East African Community (EAC), and the South African Development Community (SADC).  There was a separate 2013 Arab Investment Agreement of the League of Arab States (LAS).  By addressing the fragmentation of investment regulations, the Protocol is designed to be the single standard for investments in Africa.

At the international level, upon its entry into force (EIF), the AfCFTA Investment Protocol will replace all intra-African bilateral investment treaties. In addition, the 54 countries that are signatories to the AfCFTA Agreement will align their investment laws, regulations, and policies with the Protocol within five years of EIF.  Similarly, the Regional Economic Groups on the Continent will bring their investment codes in alignment with the Protocol within 5-10 years of EIF.  Furthermore, the Protocol will form the basis for African countries’ investment treaty engagement with countries outside of Africa.

Within the time frames stipulated above, companies-including U.S. businesses-with investment interests in multiple African countries will no longer have to deal with different investment standards and fragmented investment regulations from country to country.  The protocol should create a more predictable governance regime for investments and a more positive investor experience.

At the national level, the member states of the AfCFTA will establish national focal points (NFPs) to facilitate the coordination of investment activities across ministries and agencies.  They will establish communication and cooperation between their NFP and other NFPs on the Continent.  The AfCFTA Secretariat will play a role in helping to coordinate such interactions and will assist in harmonizing incentive policies for investments that are of strategic interest.

For more information on the status of the AfCFTA Investment Protocol, see the AfCFTA Secretariat’s Investment guidance. 
For more information about Africa’s regional integration and to formulate your strategy for doing business in this context, see our dedicated AfCFTA Resource Page or contact: U.S. Commercial Service Ghana at Office.Accra@trade.gov, Tel: +233-(0)30-274-1870.