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AfCFTA's Struggle: Africa's Global Trade Share Remains at 3% reports say

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louis Buyisiwe

Mar 4, 2024

Still challenges with AfCFTA

"Graph illustrating Africa's global trade share at 3%, highlighting the challenges and opportunities in regional integration under the AfCFTA framework."
A view of the African Continental Free Trade Area (AfCFTA) headquarters, the epicenter for strategizing Africa's trade elevation

Africa's global trade share remains under 3%, largely influenced by merchandise trade in 2023, according to a recent Economic Commission for Africa report. Despite efforts towards regional integration, African countries still predominantly trade with non-African nations.

The report highlights a lag in meeting macroeconomic convergence criteria and notes minimal progress in intra-African trade since the launch of the African Continental Free Trade Area in 2021, with intra-African trade decreasing slightly from 2021 to 2022.

Infrastructure developments in roads and ICT have advanced, but rail and energy sectors face challenges, primarily due to funding shortages. ECA's Regional Integration and Trade Division Director, Stephen Karingi, points out that governance issues, poverty, and unemployment remain significant hurdles. He emphasizes that the success of the free trade area depends on effective implementation to harness the benefits of market and trade integration across Africa.

Addressing the infrastructure funding gap, estimated between $130bn and $170bn annually, experts suggest innovative financing methods like blended finance, sustainability-focused bonds, and debt-for-nature swaps to support Africa's trade and integration efforts.

You can also read our Xtrafrica article about the goals of  African Continental Free Trade Area

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