The United Nations Conference on Trade and Development (UNCTAD) has emphasized that boosting intra-African trade, implementing macroeconomic reforms, and leveraging financial innovation can help African economies reduce their dependence on volatile global markets.
Several countries, including Kenya, Ghana, Cameroon, Egypt, Rwanda, and Tanzania, are currently piloting the African Continental Free Trade Area (AfCFTA), but the agreement still faces significant hurdles. Key challenges include the harmonization of sub-regional economic blocs, infrastructure deficits, restrictive licensing regimes, customs clearance delays, and visa requirements. Additionally, unresolved issues surrounding the rule of origin for goods like cars and textiles continue to slow progress.
Despite AfCFTA’s formal launch in 2021, large-scale trade under its framework remains limited, with only trial-phase shipments recorded so far. Trade experts highlight that eliminating tariffs on 90% of goods is crucial for unlocking the pact’s full potential.
In its 2024 Economic Development in Africa Report, UNCTAD warns that Africa’s heavy reliance on commodity exports, coupled with high trade costs and weak infrastructure, leaves its economies vulnerable to external shocks. Currently, nearly half of African nations derive at least 60% of their export earnings from oil, gas, or minerals, making them highly susceptible to price fluctuations.
The report also underscores the impact of global supply chain disruptions, such as the Red Sea crisis and Suez Canal blockages, which have significantly raised trade costs for countries like Kenya. UNCTAD suggests that diversifying exports and strengthening regional trade can create more stable revenue streams and enhance economic resilience.
“Africa faces serious challenges—from volatile global markets and high debt costs to infrastructure gaps,” UNCTAD Secretary-General Rebeca Grynspan stated. “But these challenges are also an opportunity to reshape the continent’s economic future. With bold reforms, investment, and full implementation of AfCFTA, Africa can emerge stronger, more resilient, and more competitive.”
Africa’s potential market under AfCFTA is valued at $3.4 trillion, but realizing this requires significant investment in infrastructure, including transport, energy, and ICT networks. Streamlining trade policies and customs processes while supporting industrialization is also essential for transforming the continent into a key player in global trade and economic development.