Ethiopia is finally poised to commence trading under the African Continental Free Trade Area (AfCFTA) on July 1, a significant move six years after ratifying the landmark agreement. The much-anticipated announcement was made this week by Trade and Regional Integration Minister Kassahun Gofe during a session of Parliament in Addis Ababa.
The long-awaited step signals Ethiopia's strategic push to invigorate its export sector and secure broader access to lucrative new markets across the continent. A comprehensive national implementation strategy, outlining eligible products and initial trading partners, is expected to receive approval today. The country will initially focus on goods falling under the bloc's 90 percent tariff liberalization schedule, signaling a cautious yet determined approach to integration.
While Ethiopia formally ratified the AfCFTA in 2019, its operational participation was delayed due to a combination of domestic institutional constraints and a need for greater readiness in its customs and regulatory infrastructure. The pan-African free trade zone itself became operational in 2021, and over 30 member states have already begun trading, underscoring Ethiopia's late but anticipated entry.
The move comes at a time of notable strength in Ethiopia's export performance. Minister Kassahun reported that export earnings over the past 11 months reached a remarkable $7.21 billion, far exceeding the government's target of $4.5 billion and representing a robust 121 percent increase from the previous year.
Agriculture spearheaded this impressive growth, outperforming targets by 18 percent. Mining revenues saw an even more dramatic surge, reaching four times above forecast, fueled by strong global demand for commodities. The manufacturing sector, however, lagged, achieving just over half of its target. Electricity exports and other sectors demonstrated moderate performance.
The government anticipates total exports to hit $8 billion for the current fiscal year, a goal that could be further bolstered by the new opportunities presented through AfCFTA membership. Ethiopia's entry is expected to unlock new avenues for its diverse products, fostering regional economic integration and potentially attracting more foreign investment, reported Birr Metrics.