The African Continental Free Trade Area (AfCFTA), often likened to a bridge stretching across the fragmented economies of the continent, offers more than just commerce; it promises a renaissance, a return to a time when African kingdoms and empires thrived through the vibrant exchange of goods, culture and ideas. This time, however, it is modern economies, industries and diversified markets that could flourish. In a world where global economic giants are consolidating power, Africa’s leap towards unity through trade is not just ambitious—it is essential for survival and future prosperity.
The story of the AfCFTA is rooted in the long and winding journey of Africa’s quest for economic integration. The idea of a united African market is not new; it echoes the dreams of early Pan-Africanists like Kwame Nkrumah, who famously advocated for a “United States of Africa” in the early 1960s. The economic liberation of Africa, they believed, was inseparable from its political independence.
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In 1980, the Lagos Plan of Action, led by the Organisation of African Unity (OAU), the African Union’s predecessor, first articulated the need for Africa to reduce its reliance on Western economies and foster internal trade. This vision was later reinforced by the 1991 Abuja Treaty, which outlined a roadmap for the creation of an African Economic Community.
However, it wasn’t until 21 March 2018 that the modern realisation of this dream took shape, when 44 African countries signed the AfCFTA agreement in Kigali, Rwanda. The agreement officially entered into force on 30 May 2019 after the required 22 countries ratified it, and trading under AfCFTA commenced on 1 January 2021. Today, 54 of the African Union’s 55 member states have signed the agreement, with Eritrea the only holdout.
The formation of AfCFTA was driven by a powerful recognition: despite decades of independence, African economies remained externally oriented and poorly integrated with one another. Leaders envisioned AfCFTA as a mechanism not only for trade but for reshaping the continent’s economic future, industrial capacity and political unity.
Covering a market of 1.4 billion people across 54 countries, the agreement forms the world’s largest free trade area by number of participating countries since the formation of the World Trade Organization. According to the World Bank’s 2023 report, AfCFTA could lift an estimated 30 million Africans out of extreme poverty and boost the incomes of nearly 68 million others living on less than $5.50 a day. If fully implemented, the trade pact could increase Africa’s income by $450 billion by 2035—a 7% gain—while boosting the continent’s exports by $560 billion, primarily in manufacturing.
Before the agreement, intra-African trade accounted for a mere 15% of Africa’s total trade, compared to intra-regional trade levels of 58% in Asia and 67% in Europe. This disparity underscores the transformative potential of AfCFTA to reconfigure Africa’s economic trajectory through enhanced internal collaboration and reduced reliance on external markets.
Intra-African Trade as a Catalyst
For decades, African economies have been constrained by colonial trade patterns that channel raw materials out of the continent in exchange for finished goods. AfCFTA aims to break these chains by fostering intra-African trade. By removing tariffs on over 90% of goods, addressing non-tariff barriers and simplifying customs procedures, African businesses can now trade more easily across borders. The UN Economic Commission for Africa projects that intra-African trade could increase by 33% once tariffs are fully eliminated.
Real-world examples already highlight AfCFTA’s potential. Rwanda has rapidly expanded trade ties with neighbouring Kenya and Uganda under early AfCFTA protocols. In 2022, Rwanda’s intra-African exports rose by 18%, driven by manufactured goods such as textiles and processed foods. Likewise, in 2023, South Africa’s trade with other African countries accounted for 26% of its total exports, led by machinery, vehicles and industrial equipment.
Industrialisation Through Unity
Industrialisation, the engine of economic transformation that reshaped Europe, North America and Asia, has largely bypassed Africa. AfCFTA could alter that narrative by stimulating industrial growth across the continent. Manufacturing activities are projected to increase by over 15% by 2035, potentially creating more than 18 million new jobs, especially for Africa’s burgeoning youth population, according to the African Development Bank’s 2024 outlook.
Ethiopia offers a compelling case, having invested in industrial parks such as Hawassa Industrial Park, geared towards exporting textiles and garments not just globally but increasingly within Africa. Nigeria’s automotive sector also illustrates what is possible: under AfCFTA frameworks, the country is positioning itself as a regional hub for car assembly and manufacturing, leveraging economies of scale to serve a continental, rather than solely domestic, market.
Yet industrialisation under AfCFTA is far from automatic. Infrastructure deficits, logistical barriers and regulatory inconsistencies remain significant challenges. The African Union’s Programme for Infrastructure Development in Africa (PIDA) is critical, aiming to mobilise over $68 billion by 2030 to connect economies via highways, railways and energy grids.
Economic Diversification as a Lifeline
Africa’s dependence on commodity exports—such as oil, minerals and agriculture—has made its economies highly vulnerable to global price shocks. AfCFTA provides a strategic avenue for diversification into sectors like technology, finance, manufacturing and the creative industries.
Ghana has successfully tapped into this opportunity. By capitalising on the presence of the AfCFTA secretariat in Accra, the country has expanded beyond its traditional gold and cocoa exports into digital services, fintech and automobile assembly. According to the 2023 Annual NTEs Statistics Report, Ghana’s non-traditional exports grew from $3.53 billion in 2022 to $3.94 billion in 2023—an 11.75% increase.
Kenya, too, stands out. Its “Silicon Savannah” continues to thrive, positioning the nation as a regional tech leader. The country’s ICT sector contributed 8% to GDP in 2023, with startups increasingly targeting cross-African markets under more favourable AfCFTA conditions.
Challenges on the Horizon
Despite the promise, formidable challenges remain. African economies vary widely in development levels, sparking concerns that larger players such as South Africa and Egypt might overshadow smaller, less industrialised nations. Tariff revenues, which are a key income source for many governments, could also decline in the short term, placing fiscal pressure on already fragile states.
Infrastructure bottlenecks, inconsistent regulations and political instability further threaten to undermine progress. The World Bank’s 2023 Africa Pulse report warned that without “accompanying policies and investments” to support vulnerable sectors, the benefits of AfCFTA could be unevenly distributed.
Yet history shows that no transformative journey is without turbulence. The European Union overcame significant economic and political hurdles in its formative years. Over time, integration yielded immense rewards for Europe, and it can for Africa too, if the momentum behind AfCFTA is sustained with determination and vision.
AfCFTA is more than a trade deal; it is a declaration that Africa’s destiny must be shaped by Africans, for Africans. It represents the weaving together of disparate economies into a vibrant tapestry of shared opportunity. If implemented effectively, AfCFTA could transform Africa from a patchwork of isolated markets into a globally influential economic bloc.
The road ahead is not without obstacles, but the potential gains are vast. The success of AfCFTA will hinge on political commitment, infrastructure development, private sector participation and, crucially, a pan-African consciousness that sees beyond borders. Like rivers merging into a vast ocean, Africa’s unity in trade could generate waves of prosperity that extend far beyond its shores—reshaping not only its own future, but the fabric of global commerce.
