Operational Instruments

During the launch of the operational phase of the AfCFTA in Niamey in July 2019, five operational instruments were introduced:

  • Rules of Origin: These establish the conditions under which a product or service can be traded duty-free across the region, outlining the criteria for eligibility.
  • Tariff Concessions: An agreement was reached for a 90% tariff liberalization, with a deadline set for July 1, 2020. This process unfolds over a ten-year period, including a five-year transition. An additional 7% applies to "sensitive products," subject to liberalization.
  • Online Mechanism for Monitoring, Reporting, and Elimination of Non-Tariff Barriers (NTBs): NTBs, whether physical (e.g., poor infrastructure) or administrative (e.g., customs officials' behavior), pose significant obstacles to intra-African trade. The online mechanism aims to monitor and eliminate these barriers to ensure smooth trade interactions
  • African Trade Observatory: Serving as a trade information portal, the observatory addresses trade hindrances in Africa caused by a lack of information about opportunities, trade statistics, and details about exporters and importers in countries. Member states of the AU will contribute relevant data to the observatory, which will offer comprehensive information to enhance transparency and support trade decisions.

Rule of Origin

The rules of origin under the AfCFTA govern the conditions that a product or service must meet to qualify for duty-free trade within the region. These rules are crucial for determining the origin of goods and ensuring that only products originating from within the AfCFTA member countries receive preferential treatment. The specifics of the rules of origin include criteria such as the percentage of local content required for a product to be considered as originating within the AfCFTA, as well as other factors like manufacturing processes and value-added requirements. The rules aim to prevent non-member countries from using AfCFTA benefits by transshipping goods through member countries. Establishing clear rules of origin is essential for maintaining the integrity of the trade agreement and promoting fair and mutually beneficial economic relations among AfCFTA member states.

The AfCFTA RoO are included as Annex II2 to the AfCFTA agreement. Sections I, II, and III of Annex 2II contain the general provisions, including provisions such as the criteria for ‘ wholly obtained’, cumulation, origin declarations, simple/ insufficient processing, key definitions, and others.

How to determine the origin status of a product?

If a product seeks to claim origin status for preferential market access under the AfCFTA, it must be demonstrated that any non-originating inputs have undergone significant local transformation. The exporter or producer must consult the AfCFTA Rules of Origin (RoO) in such cases. These regulations set specific standards that define “substantial transformation” for each product, relying on one or more of the three approaches described below:

  • Regional Value Content: This method uses percentage thresholds to determine origin status. The AfCFTA RoO establishes upper limits based on a percentage for the quantity of imported materials that can be used in the product.
  • Change in Tariff Classification: Products incorporating non-original materials must undergo local processing resulting in a new Harmonized System (HS) classification.
  • Specific Processing: Also known as the "technical" test, this approach sets product-specific processing requirements that must be met to qualify for origin designation.
Key steps to determine if a product meets AfCFTA RoO:
  • Identify the export destination, and if it is within the same Regional Economic Community (REC), RoO or AfCFTA RoO may apply based on preferential tariff conditions.
  • Define the precise HS code for the product.
  • Refer to the product-specific RoO in Appendix IV.
  • Consult the basic RoO guidelines in Section II of Annex II.
  • Verify if the product is exclusively created with local materials.
  • Confirm whether the source of inputs comes from another AfCFTA Member State.
  • Assess if the local processing exceeds the threshold of "insufficient operations."

These steps help ensure compliance with the AfCFTA Rules of Origin and determine the eligibility of a product for preferential treatment within the African Continental Free Trade Area.

Navigating the technical language of rules of origin in the AfCFTA

To navigate the technical language of rules of origin in the AfCFTA, traders can:

Download the AfCFTA Rules of Origin Manual

This manual provides detailed guidelines on the operationalization and application of AfCFTA rules of origin. It explains the rules used in determining the origin status of goods, outlines procedures for administering the rules, and highlights the institutional framework for implementation. The manual includes numerous examples and illustrations to aid understanding.

Utilize ITC-WCO-WTO Rules of Origin Facilitator
Draft AfCFTA rules of origin have been integrated into the ITC-WCO-WTO Rules of Origin Facilitator. This online tool allows users to browse and compare AfCFTA rules with other existing preferential trade arrangements among African countries. The tool can be accessed at https://findrulesoforigin.org/.
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