African leaders are pushing to accelerate the implementation of the African Continental Free Trade Area (AfCFTA) as rising U.S. tariffs, including rates as high as 50% on Lesotho, threaten to cripple industries and stall economic growth across the continent.
The AfCFTA, aimed at creating a single market for the continent’s 1.4 billion people across more than 50 countries, was officially launched for trading in 2021 and has been ratified by 49 countries. But progress has been slow—fewer than half of the member states are actively trading under its framework.
The World Bank projects that full implementation of AfCFTA could boost intra-African exports by 81%. Early signs of progress are evident, with intra-African trade rising by 12.4% to $208 billion last year, according to the African Export-Import Bank (Afreximbank).
“We’ve got to accelerate the establishment of our own value chain systems. What we are observing now — the weaponisation of trade policy, investment policy, nationalism — is unprecedented and it has a very negative impact on the multilateral trading system,” said AfCFTA Secretary-General Wamkele Mene.
“The lesson to observe is that we are on our own as a continent.”
The return of U.S. President Donald Trump to office in January has reignited trade anxieties globally, as his administration’s aggressive tariff policies continue to reshape supply chains and challenge decades of globalization.
Trade remains a priority at this week’s G20 finance ministers’ meeting in Durban, hosted under South Africa’s presidency, where concerns over protectionism and economic fragmentation have taken center stage.
Despite the AfCFTA’s promise, numerous challenges remain. Africa’s collective GDP stands at roughly $3 trillion—comparable to France, a G7 economy—but structural hurdles are impeding progress.
Mene confirmed that only 24 countries, including South Africa and Nigeria, are currently trading under the agreement. Raheema Parker of Oxford Economics noted that implementation has been uneven, with informal trade, weak governance, and administrative inefficiencies undermining the pact’s effectiveness.
“These barriers are especially pronounced in smaller sub-Saharan economies, which are more vulnerable to external shocks and often lack the administrative and financial capacity,” Parker said.
INFRASTRUCTURE GAP
Mene identified poor infrastructure as the single biggest constraint to intra-Africa trade. Since 2020, the African Development Bank and Afreximbank have jointly invested $65 billion in infrastructure projects. However, this figure falls far short of the estimated $100 billion-plus needed annually to meet infrastructure demands.
“Without hardened bridges and faster rail links, AfCFTA will remain a paper promise,” warned Bill Blackie, CEO of Johannesburg-based Standard Bank.
Additional obstacles include long border delays and burdensome customs paperwork. “We need to diminish all the commercial barriers,” said Chad’s former finance minister Abbas Mahamat Tolli.
DOWN WITH THE DOLLAR?
Currency usage also presents a challenge. Nearly two-thirds of cross-border transactions across more than 40 African currencies are cleared through U.S. dollar corridors. Afreximbank has urged a shift away from the dollar, pointing to cost volatility and high transaction fees.
“Local-currency corridors must become the norm to slash costs and tame volatility,” said Afreximbank’s group chief economist Yemi Kale.
The recently launched Pan-African Payments and Settlement System (PAPSS), which connects 16 central banks, is a step toward achieving this goal by reducing dependence on external currencies and minimizing transaction costs.
Despite the roadblocks, African leaders remain optimistic about AfCFTA’s transformative potential.
“We have a generational chance to build value chains that keep wealth on the continent, develop competitive industries, and create millions of jobs while shaping global supply chains from a position of strength,” Kenyan President William Ruto said earlier this month.
