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.

Report by the Overseas Development Institute