The African Continental Free Trade Area

Why African countries trade surprisingly little with each other, and how the continental free trade agreement aims to change that.

African countries trade far more with Europe, Asia and North America than with each other. Estimates commonly put trade between African countries at around 15 percent of their total trade, much lower than in Europe or Asia. The African Continental Free Trade Area, or AfCFTA, aims to change this.

What it is

The AfCFTA agreement was signed in 2018 and entered into force in 2019. Trading under it officially began on 1 January 2021. Almost every African Union member has signed, making it by number of countries the largest free trade area in the world, covering a market of around 1.4 billion people.

Its goals include:

Removing tariffs on most goods traded between members.
Reducing non-tariff barriers, such as slow border procedures and differing product standards.
Liberalising trade in services.
Encouraging investment and the growth of regional supply chains.

Why trade within Africa is low

Poor transport links: roads and railways between neighbouring countries are often weak.
Slow borders: long waits, paperwork and informal payments at crossings.
Similar exports: many countries export similar raw materials, so they have less to trade with each other.
Many small markets separated by different rules and currencies.

Potential gains

A 2020 World Bank study estimated that full implementation of the AfCFTA could lift 30 million people out of extreme poverty by 2035 and significantly increase African incomes, with most gains coming from reducing non-tariff barriers and easing trade procedures rather than cutting tariffs alone.

A truck at the border

A truck carrying goods between two neighbouring African countries might wait days at a border crossing, facing multiple inspections and documents. Each day of delay adds costs. One-stop border posts, where both countries' officials work together in one place, have cut crossing times at several borders. Such practical changes can matter more than tariff cuts.

Challenges

Turning the agreement into real trade takes time. Countries must agree on detailed rules, such as how much of a product must be made in Africa to qualify. Infrastructure must improve, and governments must follow through on reforms. Progress has been gradual.

Thinking signing a trade deal instantly boosts trade

Removing tariffs on paper helps, but trade depends heavily on roads, ports, border efficiency and business networks. The AfCFTA's success depends as much on these practical improvements as on the legal agreement.

Key takeaways

Trade between African countries is low, around 15 percent of their total trade.
The AfCFTA began trading in 2021 and covers around 1.4 billion people.
Low intra-African trade reflects poor transport, slow borders and similar exports.
The World Bank estimated full implementation could lift 30 million people out of extreme poverty by 2035.