Five years after the launch of the African Continental Free Trade Area (AfCFTA), stakeholders from across the continent gathered at the AfCFTA Secretariat in Accra to assess progress, discuss emerging challenges, and chart a way forward.
H.E. Hailemariam Desalegn Boshe, TradeMark Africa Board Chair and former Prime Minister of Ethiopia, delivered lecture on the theme “AfCFTA as a Catalyst for Agenda 2063: Seizing Opportunities in a Changing World.”
Desalegn Boshe hailed AfCFTA as one of the most significant milestones in Africa’s economic history, emphasizing that it carries the hopes of 1.2 billion people uniting under a single market with a combined GDP of $3 trillion. However, while AfCFTA has achieved notable progress in boosting intra-African trade, he warned that structural challenges must be tackled urgently to ensure the initiative reaches its full potential.
AfCFTA’s Successes: A Growing Continental Market
Since its launch in 2020, AfCFTA has made strides in removing trade barriers, fostering economic integration, and promoting industrialization. According to Desalegn Boshe, the agreement is the most advanced implementation under Agenda 2063, Africa’s long-term blueprint for economic transformation.
Key achievements include:
- Surging intra-African trade – Between 2017 and 2023, trade within the continent grew by 27%, reflecting deeper economic integration.
- Increased exports – Africa’s total merchandise exports surged by 2200%, signaling rising global competitiveness.
- Positive global outlook – The World Trade Organization (WTO) projects Africa’s trade growth will reach 5.3% in 2024, outpacing global trade averages.
Beyond trade statistics, digital transformation efforts, such as the implementation of an electronic certificate of origin and improved customs cooperation, have begun easing trade processes across the continent. Several countries, including Kenya, Rwanda, Ethiopia, and Côte d’Ivoire, have established AfCFTA National Trade Facilitation Committees to streamline trade operations.
However, despite these promising developments, AfCFTA still faces significant hurdles that threaten to slow progress.
Challenges Holding Back AfCFTA’s Full Potential
While AfCFTA has provided a framework for economic transformation, multiple barriers continue to hinder its success. Desalegn Boshe identified three key structural challenges that must be addressed:
- Infrastructure Deficiencies: The Cost of Poor Connectivity
One of the biggest obstacles to intra-African trade is the lack of efficient transport and logistics infrastructure.
Inadequate road networks, underdeveloped rail systems, and inefficient ports make it costlier to trade within Africa than with the rest of the world.
- Transport costs account for 29% of trade expenses within Africa, compared to just 7% outside the continent.
- Ports in sub-Saharan Africa rank among the lowest globally in efficiency, causing delays in goods movement.
- The African Development Bank (AfDB) estimates that Africa needs between $130 billion and $170 billion annually in infrastructure investment to bridge the gap.
- Complex Trade Regulations and Bureaucratic Bottlenecks
Despite AfCFTA’s vision of a unified market, overlapping trade regulations and bureaucratic red tape continue to slow down progress.
Countries still impose non-tariff barriers that make cross-border trade lengthy, expensive, and unpredictable.
For instance:
- A Kenyan entrepreneur exporting goods to Ghana may face 49 regulatory procedures, some requiring up to 71 days for approval.
- A businesswoman in Uganda waited five months for her product quality certification before exporting to another African country.
- Multiple regional economic blocs, such as ECOWAS, COMESA, and SADC, operate with differing rules, creating confusion and inefficiencies.
- Financial System Barriers and Currency Exchange Issues
Africa’s fragmented financial systems present another major challenge. The lack of currency convertibility means businesses often have to trade in US dollars or euros before settling payments in local currencies. This dependency raises transaction costs and creates liquidity constraints.
- A Kenyan firm purchasing goods from Ghana must first convert its local currency to US dollars, then back to Ghanaian cedis, incurring additional fees and delays.
- The reliance on foreign currencies exposes African businesses to exchange rate fluctuations and global financial shocks.
Regional Payment Systems: A Game Changer for AfCFTA?
To overcome financial barriers, Africa is pushing for stronger regional payment systems. Several initiatives have already been launched to simplify cross-border transactions and enable businesses to trade directly in local currencies.
- The Pan-African Payment and Settlement System (PAPSS) – A platform linking African central banks to facilitate real-time trade payments in local currencies.
- The East African Payment System (EAPS) – A regional network streamlining inter-bank transfers across Kenya, Uganda, Tanzania, and Rwanda.
- COMESA’s payment system – A trade facilitation tool eliminating the need for confirmed letters of credit.
While these systems mark significant progress, more needs to be done to expand their reach and adoption across the continent.
The Future of AfCFTA: Seizing Opportunities in a Changing World
Despite its challenges, AfCFTA remains Africa’s best chance to reshape its economic destiny. For the next five years, Desalegn Boshe outlined key priorities that must be addressed:
- Strengthening trade policies – Reducing barriers to goods, services, and investment.
- Investing in infrastructure – Expanding trade corridors, modernizing ports, and improving digital connectivity.
- Enhancing production and value addition – Shifting from exporting raw materials to producing finished goods within Africa.
- Ensuring inclusivity – Supporting women, youth, and SMEs to benefit from intra-African trade opportunities.
As Africa stands at a critical economic crossroads, the success of AfCFTA depends on collective action, political commitment, and financial investment.
The potential is enormous: a unified, self-sustaining African market could lift millions out of poverty, create millions of jobs, and position Africa as a major player in the global economy.
However, as Desalegn Boshe warned, ambition alone will not drive success.
“We are not short on ambition—our leaders, businesses, and people want this. But to succeed, we must remove the barriers holding us back and create an Africa that trades on its own terms.”
With the right policies and partnerships, AfCFTA can fulfill its promise of making Africa a powerful force in global trade.
