African Economic Community

African Economic Community (AEC)

The African Economic Community (AEC) is an organization of African Union states aimed at fostering mutual economic development among the majority of African countries. Its stated objectives include the creation of free trade areas, customs unions, a single market, a central bank, and a common currency — laying the foundation for an economic and monetary union.

Goals

Established by the Abuja Treaty (signed in 1991, effective from 1994), the AEC is to be built in six progressive stages:

1. Creation of regional blocs in areas where none exist (completed in 1999)
2. Strengthening of intra-REC integration and inter-REC harmonization (completed in 2007)
3. Establishment of a free trade area and customs union in each regional bloc (completed in 2021)
4. Formation of a continent-wide customs union (targeted for 2023)
5. Establishment of an African Common Market (ACM) (targeted for 2025)
6. Creation of a continent-wide economic and monetary union, including a central bank and parliament (targeted for 2028)

The final transition period is to conclude by 2034 at the latest.

Stages Progress (as of 2007)

Stage 1:

• Completed. Only the Arab Maghreb Union and Sahrawi Republic are not participating.
• Somalia is listed as participating but lacks practical implementation.

Stage 2:

• Ongoing, with steady but general progress.

Stage 3:

• Free trade areas and customs unions established within regional blocs.

• Non-participating members include:

  • DR Congo (in talks to join)
  • Eritrea, Ethiopia, Seychelles (in talks)
  • Swaziland (awaiting SACU approval)
  • Uganda (expected to join soon)
  • Angola, DR Congo, Seychelles (repeat mention)

Stage 4:

• In March 2018, 49 African countries signed the African Continental Free Trade Agreement (AfCFTA).
• The AfCFTA became operational in July 2019.
• By 2021, 34 countries had ratified the treaty.

Stages 5 & 6:

• No significant progress reported as of yet.

Pillars of the AEC

AEC’s implementation is based on Regional Economic Communities (RECs) — trade and integration blocs that form the building blocks of continental integration. Many RECs have overlapping memberships. Some states are expected to eventually streamline their participation due to duplication.

Key RECs include:

• ECOWAS (Economic Community of West African States)
• SADC (Southern African Development Community)
• COMESA (Common Market for Eastern and Southern Africa)
• EAC (East African Community)
• ECCAS (Economic Community of Central African States)
• AMU (Arab Maghreb Union) – currently not participating in the AEC due to Morocco’s opposition
• CEN-SAD (Community of Sahel–Saharan States)
• IGAD (Intergovernmental Authority on Development)

Some RECs also have tighter subgroups forming customs or monetary unions.

Other Regional Blocs (outside AEC framework)

These groups are not part of the AEC integration strategy, though many predate it:

• Greater Arab Free Trade Area (GAFTA)
• Economic Community of the Great Lakes Countries (CEPGL)
• Indian Ocean Commission (COI)
• Liptako–Gourma Authority (LGA)
• Mano River Union (MRU)

Note: Only African members of GAFTA are listed within this context. GAFTA and MRU are the only active non-AEC blocs.

African Free Trade Zone (AFTZ)

The AFTZ was announced on October 22, 2008, by the heads of SADC, COMESA, and EAC. In May 2012, the concept was extended to include ECOWAS, ECCAS, and AMU.

See Also

• African Economic Outlook
• Economy of Africa
• Economy of the African Union
• CARICOM Single Market and Economy