Five years after the African Continental Free Trade Area (AfCFTA) launched with ambitions to unify 1.3 billion people into a single market, persistent border inefficiencies continue to stifle progress for small businesses, particularly those led by women and youth.
A new United Nations Development Programme (UNDP) report, drawing from investigations at Ghana’s Aflao and Elubo borders, reveals systemic hurdles—from extortion risks to crumbling infrastructure—that force traders into informal channels, undermining both revenue and regional integration.
Informal Payments, Formal Losses
The UNDP study found that excessive customs duties, unpredictable delays, and demands for unofficial fees by border officials have pushed many small-scale traders to bypass formal processes entirely. This informal shift deprives governments of tax revenue while leaving businesses vulnerable to exploitation and excluded from AfCFTA’s protections. Women and youth-led enterprises, which dominate cross-border commerce in sectors like agriculture and textiles, are disproportionately affected.
“These traders aren’t opting for informality by choice—they’re being priced out by dysfunction,” said UNDP Programmes Associate Jemima Michael. She noted that 68% of women-led businesses surveyed reported paying middlemen to navigate bureaucratic bottlenecks, eroding already thin profit margins. Limited cold storage, poor road networks, and sparse digital tracking systems further exacerbate losses, particularly for perishable goods.
Ghana’s Balancing Act
While Ghana has positioned itself as an AfCFTA champion, hosting the agreement’s secretariat in Accra, the report underscores gaps between policy ambitions and on-the-ground realities. Divine Kutortse, program manager at Ghana’s AfCFTA National Coordinating Office, acknowledged the disparities. “Economic growth cannot be exclusive. If women and youth can’t scale their businesses, we’re failing the agreement’s core mandate,” he said.
UNDP analysts estimate that streamlining border processes could boost formal trade volumes by up to 30% among small enterprises within two years. Key recommendations include deploying digital clearance platforms to reduce human interface—and thus corruption risks—alongside investments in warehouse facilities and gender-targeted access to trade financing.
Security and Stigma
Beyond logistics, security concerns deter formal participation. Female traders reported harassment at checkpoints, with some border officials coercing sexual favors to expedite shipments. Youth-led startups, meanwhile, struggle to meet complex documentation requirements designed for larger firms. “Many young entrepreneurs lack the legal literacy or capital to comply,” Michael added. “They become invisible to a system meant to empower them.”
Pathways to Inclusion
The UNDP urges Ghana to pilot blockchain-based customs systems and expand partnerships with fintech firms to digitize payments, citing Kenya’s success in curbing informal trade through mobile money integrations. Training programs on AfCFTA compliance for women and youth business groups are also prioritized.
As Africa’s intracontinental trade languishes at 18%—compared to 59% in Asia—the report frames border reforms as urgent economic imperatives. “AfCFTA’s vision hinges on making borders bridges, not barriers,” Kutortse said. “Without inclusivity, this historic pact risks becoming another missed opportunity.”
With the African Union targeting a 33% intra-African trade increase by 2030, Ghana’s response to these findings may set a precedent for whether the continent’s smallest businesses can finally access the markets meant to lift them.
