Context
The AfCFTA, operational since 2021, aims to boost intra-African trade by eliminating tariffs and harmonizing regulations. Current intra-African trade represents only 15-17% of total African trade, significantly lower than other regions.
Opportunities
Manufacturing Growth: Economies of scale could make African manufacturing more competitive. Countries like Ethiopia and Kenya are positioning themselves as regional hubs.
Agricultural Trade: Reduced barriers could expand markets for smallholder farmers, though food security concerns require careful policy.
Services Integration: Financial services, telecommunications, and professional services could see significant cross-border growth.
Challenges
Infrastructure deficits, particularly in transport and energy, limit trade flow. Non-tariff barriers (standards, regulations, corruption) remain significant obstacles. Some countries worry about unfair competition from larger economies.
Recommendations for Success
Investments in regional infrastructure must accompany trade liberalization. Capacity-building for businesses, particularly SMEs, is essential. Coordination among member states on standards and regulations is critical.