Our Programmes



Sign up to our newsletter.

Follow ODI

The AfCFTA Protocol on Investment: issues and potential impacts

Briefing/policy papers

Written by Yohannes Ayele, Martha Belete, Dirk Willem te Velde

This briefing note explores how the Draft African Continental Free Trade Area (AfCFTA) Protocol on Investment (PoI), adopted at the 2023 African Union Heads of State meeting in February 2023, aims to create a conducive investment climate in AfCFTA State Parties.

The note lays out how the AfCFTA Protocol on Investment provides additional measures around investor protection and facilitation, and how it balances the obligations of investors and host country states. We argue that if adopted and implemented by State Parties, the AfCFTA Investment Protocol will lead to more and higher intra-African investment, and that this consistent and transparent approach will attract more foreign direct investment (FDI) from outside the region. This, in turn, will have positive effects coming from increased income, market size impacts and predictable rules on investment.

We elaborate further in the example of Ethiopia, by unpacking concerns around policy coherence, exploring current political and economic challenges, and highlighting the importance of institutions to start up the AfCFTA national implementation committee.

If you would like to find out more about how we support investment and trade in Africa, please visit our SITA programme page. You will find a wealth of research and resources on the negotiation and implementation of the African Continental Free Trade Area Agreement.