Mauritius commences trade under African Continental Free Trade Area Agreement

The government of Mauritius commenced trade under the African Continental Free Trade Area (AfCFTA) after implementing amendments to the First Schedule of the Customs Tariff Act and issuing the Customs (Export to the AfCFTA) Regulations 2021 under Government Gazette No. 13 of 6 February 2021 which applies with effect from 1 January 2021.

African Union member states formerly agreed to open negotiations for the AfCFTA in 2012 and the treaty was signed by 44 countries in March 2018 in Kigali, Rwanda. It entered into force on 30 May 2019 and trading started on 1 January 2021 after a six-month delay caused by the COVID-19 pandemic. All African countries, except for Eritrea, are now signatories and, as of 4 December 2020, 36 countries had ratified the treaty.

In terms of numbers of participating countries, AfCFTA is the world’s largest free trade area since the formation of the World Trade Organisation. It is intended to cover a market of 1.2 billion people and a gross domestic product (GDP) of $2.5 trillion, across all 55 member states of the African Union.

AfCFTA’s main purpose is to create a single market in Africa and deepen the economic integration of the continent. It seeks to establish a liberalised market through multiple rounds of negotiations, facilitate investment by aiding the movement of capital and people and, ultimately, to move towards the establishment of a future continental customs union.

With average tariffs of 6.1%, businesses currently face higher tariffs when they export within Africa than when they export outside it. AfCFTA is intended to progressively eliminate tariffs on intra-African trade, making it easier for African businesses to trade within the continent and cater to and benefit from the growing African market.

Consolidating Africa into one trade area provides great opportunities for trading enterprises, businesses and consumers across Africa and the chance to support sustainable development in the world’s least developed region. The UN Economic Commission for Africa (ECA) estimates that AfCFTA has the potential both to boost intra-African trade by 52.3% by eliminating import duties and to double this trade if non-tariff barriers are also reduced.

Mauritius has over the years been an offshore gateway to Africa and has advocated for developing economic channels between itself and other African states, leveraging its position as Africa’s best place to conduct business.

Mauritius has firmly established and promoted itself as a regional hub for facilitating investments on the continent. AfCFTA provides a platform for Mauritius to contribute significantly to the new African impetus by making available to investors and businessmen an ecosystem that not only makes it easier for them to do business with Africa, but also enhances and safeguards their investments.

The AfCFTA also gives Mauritius market access estimated to be as large as 1.3 billion people across Africa, with a combined gross domestic product (GDP) of $3.4 trillion, which covers most service sectors, including financial services, telecommunications, ICT, professional services, construction and health.