African nations must urgently address systemic barriers such as crumbling infrastructure, regulatory bottlenecks, and financial fragmentation to unlock the full economic potential of the African Continental Free Trade Area (AfCFTA), leaders and analysts warned this week.
Despite the landmark agreement’s promise to boost intracontinental commerce, structural hurdles continue to stifle progress, leaving Africa trailing global peers in trade efficiency.
Intra-African trade accounts for just 15% of the continent’s total trade volume, far below Asia’s 50%, according to data cited at an AfCFTA Secretariat forum in Accra. While Africa’s global merchandise exports grew 200% between 2017 and 2023, trade among African nations rose only 27%, underscoring persistent reliance on raw material exports to external markets.
“We cannot industrialize if we remain exporters of cocoa, gold, and oil only to reimport finished goods at inflated prices,” said Hailemariam Desalegn Boshe, former Ethiopian prime minister and TradeMark Africa chair, during his keynote address. “This cycle traps us at the bottom of global value chains.”
Logistics Lifelines
Transport inefficiencies emerged as a critical bottleneck. Moving goods within Africa costs 29% of their total value on average, compared to 7% for exports outside the continent, due to inadequate roads, congested ports, and sparse rail networks. Sub-Saharan African ports rank among the world’s least efficient, per World Bank metrics, while the African Development Bank estimates the region’s annual trade infrastructure deficit at $130 billion to $170 billion.
Hailemariam highlighted stark examples: A Kenyan tea exporter under the AfCFTA’s Guided Trade Initiative faced 48 procedural steps, 21 institutions, and 38 documents over five months to ship goods to Ghana. “Such delays erode competitiveness,” he said. “Trade agreements alone cannot fix broken systems.”
Currency and Regulation Hurdles
Financial fragmentation further complicates cross-border commerce. Businesses often must convert local currencies to U.S. dollars before trading with neighboring nations, adding costs and delays. Meanwhile, inconsistent regulations and weak standardization hinder market access. Less than 20% of Africa’s trade complies with the African Standards Harmonization Model, prolonging product approvals.
AfCFTA Secretary-General Wamkele Mene outlined solutions, including digitizing customs processes, expanding one-stop border posts, and harmonizing industrial policies. Pilot projects like Ghana’s Akanu-Noepe border post, where upgraded utilities aim to cut processing times, signal incremental progress.
Strategic Shifts
The International Trade Centre identifies fertilizers, beauty products, and processed minerals as high-potential sectors for intra-African trade growth. Yet experts stress that shifting from raw material exports to value-added production requires coordinated investment.
“The vision is clear,” Hailemariam said. “Now we must build the roads, ports, and factories to make it real.” With the AfCFTA’s operational phase underway, the continent faces a pivotal test: translating ambition into tangible gains for its 1.3 billion people.
