In January 2026, world leaders in government, business and civil society gathered in Davos, Switzerland, for the annual World Economic Forum under the theme “A Spirit of Dialogue”. Within this forum, Africa’s economic transformation and integration agenda featured prominently, with a clear recognition that the continent’s global competitiveness is inextricably linked to deeper market integration and structural reforms. Against a backdrop of slowing global growth, persistent infrastructure gaps and shifting geopolitical alliances, African voices at Davos underscored the urgency of accelerating regional trade integration through frameworks such as the African Continental Free Trade Area (AfCFTA) and related digital and logistical infrastructures.
The underlying premise reinforced at Davos 2026 is simple but profound: Africa’s economic future depends on its ability to move beyond historic patterns of exporting raw materials and to establish integrated markets that can compete in manufacturing, services, and high-value sectors. This transformation is contingent on reducing trade costs, adopting cutting-edge technologies, and forging strategic global partnerships to scale investment and infrastructure development.
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The African Continental Free Trade Area represents the most ambitious trade integration initiative in the continent’s history. By connecting 55 countries with a combined population of more than 1.3 billion and a gross domestic product of about US$3.4 trillion, AfCFTA aims to create the world’s largest free trade zone by number of participating economies.
Global economic projections indicate that AfCFTA’s full implementation could increase Africa’s regional income by around 7 per cent, equivalent to roughly US$450 billion by 2035. Intracontinental exports are forecast to surge by more than 80 per cent, while overall exports could expand by nearly 29 per cent relative to baseline scenarios without deeper integration. Such growth would not only enhance aggregate output but also spur employment and broader economic inclusion across diverse demographic groups.
The scale of these potential gains is comparable to major regional integration successes elsewhere. Africa’s intra-regional trade share, currently estimated at around 16 per cent of total continental trade, remains low compared with Asia and Europe. However, ongoing progress, including rising trade between African countries and the introduction of structured reforms, points to a trajectory of accelerating regional economic interdependence.
Cutting Trade Costs: Digital Infrastructure and PAPSS
Central to achieving these transformative objectives is the deployment of digital infrastructure that lowers the cost and complexity of trade. At Davos, AfCFTA leaders emphasised the need for modern digital systems to address barriers that have long impeded seamless cross-border commerce across Africa.
One notable initiative catalysing this evolution is the Pan-African Payment and Settlement System (PAPSS). Developed in partnership between the African Union and the African Export-Import Bank, PAPSS enables traders to conduct intra-African transactions in local currencies, significantly reducing dependence on external currencies such as the US dollar and mitigating foreign exchange frictions that have traditionally raised transaction costs.
By enabling real-time payments across borders, PAPSS is expected to improve financial transparency, speed up settlements, and attract greater participation from small and medium-sized enterprises that have previously been deterred by high payment costs and currency risks. These improvements are critical in a context where Africa’s logistics costs remain among the world’s highest, with infrastructure barriers continuing to add substantial financial burdens to cross-border trade.
Tackling Non-Tariff Barriers: Customs, Logistics and Harmonisation
While tariff reductions have long been the focus of trade agreements, it is increasingly clear that non-tariff barriers, such as customs delays, inconsistent regulatory frameworks, and costly logistics present equally formidable constraints to intra-African commerce. At Davos, the AfCFTA Secretary General emphasised that without removing these barriers, the full economic advantages of a continental free trade area will remain unattained.
Customs procedures, in particular, impose significant costs and delays for African exporters. Streamlining these processes through harmonised regulations and modernised border systems can dramatically improve trade fluidity, enabling goods to move more swiftly and efficiently across national frontiers. Moreover, logistics enhancements, including improved road corridors, rail links, and port connectivity, are essential to support value chains that span multiple countries. These infrastructural advancements not only reduce unit costs but also bolster producer competitiveness in global markets.
Technology and Value Addition
Trade integration is as much about deepening continental markets as it is about shifting the structure of production. Historically, Africa’s export profile has been dominated by primary commodities, leaving it exposed to volatile global price swings and limiting opportunities for value addition. Davos 2026 discussions highlighted the imperative of integrating technological innovation, including artificial intelligence, into sectoral strategies.
Artificial intelligence and data-driven platforms can optimise manufacturing processes, enhance predictive logistics, and improve market forecasting, giving African firms a competitive edge in complex global value chains. Such technologies are also crucial in agribusiness, where digital systems can streamline supply chains, reduce waste, and enable smallholder farmers to access lucrative markets more effectively.
The transition from raw material export to manufacturing and services is central to expanding employment and improving living standards. Projected increases in foreign direct investment linked to AfCFTA integration, potentially ranging between 111 per cent and 159 per cent by 2035 under certain scenarios would bring not only capital but also technical know-how and managerial expertise essential for higher-value economic activities.
Africa’s trade integration agenda extends beyond regional confines. Success in building globally competitive industries depends on sustained investment from international partners in infrastructure, technology, and skills development. Global private capital, multilateral development banks, and sovereign investors are increasingly recognising Africa’s growth potential, particularly as trade reforms reduce barriers and enhance transparency.
Strategic investments in energy infrastructure, digital networks, and logistics corridors are critical to supporting the productivity gains envisaged by AfCFTA. For example, closing the continent’s trade finance gap, estimated at around US$100 billion requires coordinated financial innovation and risk-sharing mechanisms that can underwrite cross-border commercial activities and attract broader capital flows.
Countries such as South Africa are showcasing structural reforms aimed at strengthening investor confidence, including stabilising energy supplies and enhancing macroeconomic stability. These efforts, presented at Davos in the context of broader integration goals, signal to global markets that Africa is ready to compete on the basis of predictable policies, improving infrastructure, and progressive economic reforms.
Integration as Africa’s Competitive Imperative
The consensus emerging from Davos 2026 is unequivocal: Africa’s global competitiveness will be determined by the degree to which it can deepen intra-continental integration while aligning with global trade systems. The AfCFTA represents a once-in-a-generation opportunity to unlock economic growth, diversify export profiles, and enhance shared prosperity. However, realising this potential requires a sustained focus on reducing trade costs, modernising digital infrastructure, eliminating non-tariff barriers, and attracting long-term investment.
By embracing these imperatives and leveraging strategic global partnerships, Africa can transform itself from a region defined by raw material exports to a hub of manufacturing and services that is fully integrated into the global economy. The decade ahead will test the continent’s resolve, but the gains from effective integration promise to be transformational not only for Africa’s economic landscape but also for its role in shaping inclusive and rules-based global trade in the 21st century.
