AfCFTA Seen as Strategic Shift

ACCRA: African leaders and economists are increasingly positioning the African Continental Free Trade Area (AfCFTA) as a central instrument for reshaping the continent’s economic trajectory, amid growing concerns over the limitations of global trade frameworks.

As debates intensify within the World Trade Organization (WTO), many policymakers are turning their attention inward, emphasizing the need to strengthen intra-African trade as a foundation for long-term growth. Currently, trade within Africa accounts for roughly 15% of total trade, significantly lower than in regions such as Europe and Asia, where intra-regional trade exceeds 60%.

For advocates of AfCFTA, this gap represents both a challenge and an opportunity.

“Africa has historically traded more with the world than with itself,” said a West African trade economist. “AfCFTA is about reversing that pattern and building internal economic strength.”

Launched to create a single market of over 1.3 billion people, AfCFTA aims to facilitate the free movement of goods, services and investment across the continent. By reducing tariffs and non-tariff barriers, the agreement is expected to lower the cost of doing business and stimulate cross-border commerce.

However, beyond trade volumes, the initiative is increasingly being viewed as a tool for industrial transformation. Many African economies remain heavily reliant on the export of raw materials, including minerals, agricultural products and energy resources. These exports generate revenue but often capture only a small share of the total value within global supply chains.

“Exporting raw commodities is not enough,” said an industrial policy specialist based in East Africa. “The real gains come from processing, manufacturing and moving up the value chain.”

Under AfCFTA, countries are exploring ways to develop regional value chains in sectors such as agriculture, textiles, pharmaceuticals and automotive manufacturing. By processing goods closer to their source, African economies can retain more value, create jobs and reduce vulnerability to external shocks.

For example, cocoa-producing countries have long exported raw beans while importing finished chocolate products at higher prices. Similar patterns exist in cotton, where raw fiber is exported and finished garments are imported. Policymakers argue that AfCFTA provides a framework to change this dynamic.

The agreement also has implications for small and medium-sized enterprises (SMEs), which make up a significant portion of Africa’s economic activity. By expanding market access and reducing regulatory fragmentation, AfCFTA could enable these businesses to scale beyond national borders.

“Regional integration can unlock opportunities for businesses that were previously limited by small domestic markets,” said a trade official involved in AfCFTA implementation.

Despite its potential, the success of AfCFTA is not guaranteed. Infrastructure deficits, including transport networks and energy supply, continue to constrain trade across many parts of the continent. In addition, differences in regulatory systems and administrative procedures can create barriers to implementation.

Financing is another critical issue. Industrialization requires substantial investment in manufacturing capacity, technology and human capital. Without adequate funding, efforts to move up the value chain may face delays.

ALSO READ: AfCFTA powers TZ trade

There are also concerns about uneven benefits. Larger or more industrialized economies may initially capture a greater share of gains, potentially widening disparities within the continent. Addressing this will require coordinated policies to support less-developed countries and ensure inclusive growth.

Nevertheless, momentum behind AfCFTA continues to build. Governments are aligning national strategies with regional priorities, while private sector interest is increasing as new opportunities emerge.

Analysts note that AfCFTA is not intended to replace global trade engagement but to strengthen Africa’s position within it.

“This is about leverage,” said the West African economist. “A stronger internal market gives Africa more negotiating power externally.”

As global trade dynamics evolve, AfCFTA represents a strategic shift toward greater economic self-reliance. Its implementation will be closely watched as a test of whether regional integration can deliver on its promise to transform Africa’s role in the global economy.

“The long-term goal is clear,” the industrial policy specialist said. “Africa must move from being a supplier of raw materials to a producer of value.”