Three years has passed since the historic launch of the African Continental Free Trade Area (AfCFTA), yet, it stands at a critical inflection point. Can it deliver the promised economic transformation, or will bureaucracy, inequality, and border bottlenecks stall or even kill the dream of a united African market?
The African Continental Free Trade Area (AfCFTA) officially came into effect on 1st January, 2021, with a bold transformative vision: to create a single market for goods and services across 54 African countries, encompassing a population of 1.3 billion and a combined GDP of $3.4 trillion.
The main objectives of the pact are to:
- Boost intra-African trade, which currently hovers at just 15–18% of total trade (vs. 58% in Asia and 67% in Europe)
- Eliminate 90% of tariffs
- Harmonise regulations and address non-tariff barriers
- Drive job creation, poverty reduction, and continental integration
Promise and Potentials
According to the World Bank, the AfCFTA could:
- Lift 30–50 million people out of extreme poverty
- Add $450 billion to Africa’s income by 2035
- Increase intra-African exports by 81–109%
- Boost wages by 11.2% for women and 9.8% for men
With women accounting for 70% of cross-border informal traders, the agreement is positioned to be a game-changer for gender-inclusive economic growth.
Early Gains and Success Stories
1. Guided Trade Initiative (GTI)
The Guided Trade Initiative(GTI) was launched in October 2022, emerged as the initial sign of AfCFTA’s progress, the first phase rolled out in eight countries: Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia.
These nations traded goods like ceramics, batteries, tea, coffee, and processed foods, testing the regulatory and logistics environment for meaningful cross-border exchange.
Grace Amoah, agripreneur (Ghana):
“The GTI opened doors for my processed yam exports to Kenya. Before, tariffs and border delays made it impossible. Now, I’m reaching new customers but the paperwork is remains a headache.”
- More than 12,000 MSMEs across 30 AU member states have received support through UNDP-led initiatives.
- Ghanaian agripreneurs are reaching East Africa, also West African fashion brands are accessing Southern African markets.
2. Tariff Liberalisation and Payments Infrastructure
- 87–88% consensus reached on rules of origin
- 41 countries have submitted liberalisation offers in services like business, communications, and tourism
- Pan-African Payment and Settlement System (PAPSS) backed by a $500 million West African fund, tackles currency convertibility issues, with a $3 billion rollout in progress
3. Private Sector Engagement and MSME Momentum
Forums like Biashara Afrika 2024 in Kigali spotlighted Micro, Small, and Medium Enterprises or MSMEs (which account for 80% of African employment), linking entrepreneurs to markets and capital.
Aisha Uwimana, fashion entrepreneur (Rwanda):
“The AfCFTA forums gave me a platform to showcase my designs to buyers from Nigeria and South Africa. I’ve doubled my orders, but shipping costs and inconsistent customs rules still eat into my profits.”
Red Tape and Reality Check
1. Trade Delays and Non-Tariff Barriers (NTBs)
Despite promises of tariff reductions, NTBs still pose a heavy drag equivalent to an 18% import tax due to:
- Costly customs procedures
- Complex licensing requirements
- Certification inconsistencies
Chukwudi Okeke, textile trader (Nigeria):
“I tried exporting to Côte d’Ivoire, but border delays and extra fees made it costlier than selling locally. AfCFTA promises free trade, but the reality is different.”
2. Unfinished Negotiations
- Phase I (trade in goods, services, dispute settlement) is incomplete
- Phase II (investment, IP rights, competition, e-commerce) is still under negotiation
- Regulatory harmonisation is hampered by GDP disparities, Nigeria, Egypt, and South Africa alone contribute over 50% of the continent’s GDP
3. Infrastructure Bottlenecks
Africa’s limited road, rail, and port infrastructure continues to strangle commerce. IMF research shows that removing NTBs could be four times more impactful than tariff cuts.
Samuel Mwangi, logistics operator (Kenya):
“I want to transport coffee to West Africa, but the lack of reliable roads and high port fees make it unprofitable. AfCFTA needs to fix these bottlenecks.”
4. Limited Visa-Free Movement
Only Benin, Gambia, and Seychelles offer unrestricted African access. The 2022 Africa Visa Openness Index shows modest gains but movement remains restricted for most traders and entrepreneurs.
Who’s Slowing it Down?
1. Non-Ratifying and Reluctant States
- Eritrea remains the only AU member yet to sign
- Only 41 of 54 signatories have ratified the agreement
- Countries like Nigeria initially delayed due to concerns over local market protection
2. Government Inertia
Many nations have yet to:
- Gazette AfCFTA-compliant tariff rates
- Modernise customs infrastructure
- Provide trade facilitation resources
Wamkele Mene, AfCFTA Secretary-General:
“Some countries lack the fiscal space to fully implement AfCFTA without external support.”
3. Overlapping Trade Blocs and Conflicting Policies
Africa’s Regional Economic Communities (RECs) COMESA, ECOWAS, SADC, and so on, often impose conflicting trade rules. This messy, tangled and often hard to navigate regulations undermines AfCFTA’s unified vision.
4. MSME Barriers
Despite being central to African economies, many MSMEs lack:
- Digital literacy
- Access to credit
- Market visibility
- Policy advocacy support
Persistent Structural Challenges
Economic Inequality
Africa has the highest income disparity among all global trade blocs. Without inclusive policies, smaller economies and businesses risk being left behind.
External Pressures
- COVID-19 delayed the original July 2020 launch
- Ongoing shocks from the Russia–Ukraine conflict, inflation, and climate change continue to divert attention from AfCFTA reforms
Digital & Financial Gaps
- Slow adoption of digital trade tools
- Limited trade finance access especially for women- and youth-led businesses
The AfCFTA remains one of Africa Union’s most ambitious policy undertakings. While early wins like the GTI and PAPSS show promise, real transformation demands:
- Accelerated infrastructure investment
- Full ratification and regulatory alignment
- Targeted MSME support programs
- Visa and mobility reforms
- Bridging income and access disparities
Wamkele Mene:
“Young Africans and women traders must benefit from the implementation of this agreement, otherwise it will(would) have failed.”
Key Takeaways
- Scale: 54 signatories, $3.4 trillion GDP, 1.3 billion people
- Potential: $450B income gain by 2035, 50M people out of poverty
- Trade Gap: Intra-African trade is only 15–18% of total vs. 58–67% in other regions
- Progress: 8 GTI countries, 87–88% tariff rule consensus, 41 ratifications
- Barriers: NTBs = 18% extra cost, infrastructure gaps, MSME exclusion
