The Zambezi Institute
Abstract
Africa is home to roughly 17% of the world’s population and some of its fastest-growing consumer markets, yet trade between African countries still makes up less than a fifth of the continent’s total trade — nowhere near the levels seen in Europe or Asia. This paper argues that Intra-African trade is the most under-prioritized lever the continent has for real economic transformation.
Global partnerships and foreign investment summits dominate the headlines, but the harder, less glamorous work of connecting African producers, manufacturers, and consumers to each other keeps getting pushed down the agenda.
Drawing on recent trade data, infrastructure figures, and demographic projections, this paper makes the case that unlocking African trade isn’t primarily a tariff problem — it’s a political and infrastructural one. Left unaddressed, Africa risks remaining a continent of commodity exporters rather than becoming the integrated economic bloc its size and population could support.
1. Introduction
The African Continental Free Trade Area (AfCFTA) was signed with the promise of building a single market of 1.4 billion people and a combined GDP north of $3 trillion. On paper, it should be the biggest trade story of the decade.
In practice, it’s treated as a footnote.
Most policy energy still goes toward chasing foreign investment, courting aid, and negotiating bilateral deals with powers outside the continent. Meanwhile, a truck can take three weeks to move goods 1,500 kilometers across parts of Africa — a distance that takes three days almost anywhere else in the world.
Trade unions tracking AfCFTA’s rollout have documented average customs dwell times of around 126 hours at African border posts, and logistics costs that run close to double the global average. Non-tariff barriers, currency fragmentation, and outright corruption at checkpoints cost traders more than tariffs ever did, even after decades of tariff-cutting agreements.
This paper argues a simple point: Africa’s future will not be unlocked by more aid, or by chasing more exports to the outside world. It will be unlocked by Africans trading with Africans.
2. Why Intra-African Trade Matters for the Future
2.1 The Numbers Are Not Moving Fast Enough
Before AfCFTA came into force, formal intra-African trade sat at somewhere between 12% and 18% of the continent’s total trade — depending on the year and the source.
Compare that to Intra-Asian trade, which now runs at roughly 60% of the region’s total trade, or Intra-European trade, which sits close to 68%. Africa is trading with itself at a fraction of the rate other regions manage among their own neighbors.
There has been real movement since AfCFTA’s operational launch in 2021. Afreximbank’s most recent Africa Trade Report puts Intra-African trade at $192.2 billion in 2023, a 3.2%
increase on the year before, and formal intra-African trade’s share of total African trade rose from 13.6% in 2022 to 14.9% in 2023. The IMF and Afreximbank now project total African trade — internal and external combined — will hit roughly $1.5 trillion in 2025, growing at an average of 5.1% a year through 2026, comfortably outpacing global trade growth of around 3.3%. Intra-African trade specifically is forecast to grow at 6.6% annually between 2025 and 2028, adding an estimated $261.4 billion to the continent’s combined GDP by 2028.
Those are genuinely encouraging trends. But they still leave Africa trading internally at a level Asia passed decades ago. The UN Economic Commission for Africa’s own modeling suggests full AfCFTA implementation could lift intra-African exports by 45% by 2045 — worth roughly $275.7 billion in additional cross-border trade. That’s a big number, but it also underlines how much runway is left unused today.
2.2 Demographics and Demand
By 2050, roughly 1 in 4 people on Earth will be African, and the continent’s median age will still be under 25. That’s an enormous, young consumer base for food, housing, healthcare, digital services, and manufactured goods — arriving whether or not African economies are ready to serve it.
If that demand ends up being met by imports from outside the continent, the jobs and value created by meeting it leave with the goods. If it’s met by regional production instead, it creates a multiplier effect: farms supply factories, factories supply shops, shops pay wages,and those wages get spent locally. Recent regional breakdowns show manufacturing already accounts for about 46% of intra-African exports, ahead of food (21%), fuels (20%), and ores and metals (7%) — a signal that African-to-African trade is already skewed toward higher-value goods than Africa’s trade with the rest of the world, which still leans heavily on raw commodities.
2.3 Industrialization Requires Regional Markets
No country has ever industrialized by selling raw materials alone. Manufacturing needs scale to make sense economically. A single national market of 50 million people is too small to justify a car plant or a pharmaceutical factory. A market of 1.4 billion is not. Regional value chains allow for specialization: one country grows cotton, another spins it into yarn, a third turns that yarn into garments. Today these links barely exist, not because the raw ingredients are missing, but because the rules, the logistics, and the payment systems needed to connect them across borders still don’t reliably work.
2.4 Resilience to Global Shocks
COVID-19, the war in Ukraine, and repeated spikes in global freight costs all exposed how dependent African economies are on distant supply chains for food, fuel, and medicine.
Countries with stronger regional sourcing options weathered those shocks better than countries that didn’t. Trade within Africa spreads risk geographically — when one region faces drought, another often has surplus, but only if the infrastructure and trade rules exist to move goods between them quickly.
3. The Barriers Everyone Ignores
Tariffs, on paper, are already low across most of the continent. The real barriers sit
elsewhere:
1. Infrastructure Deficit. Only around 30% of Africa’s roads are paved. Rail networks, ports, and cold-chain storage remain fragmented by colonial-era routes built to move commodities north-south to ports for export, not east-west between neighboring countries.
2. Non-Tariff Barriers. Multiple customs checks, inconsistent standards, and arbitrary fees stack up at nearly every border crossing. Average customs dwell time across African borders runs around 126 hours — more than five full days lost before goods even clear the checkpoint. Informal payments and delays routinely cost traders more than the duties they’re legally owed.
3. Finance and Currency Fragmentation. Africa has more than 40 different national currencies. Roughly 80% of intra-African trade is still invoiced in US dollars, which adds conversion costs, delay, and exposure to dollar-driven shocks for transactions that never actually leave the continent. The Pan-African Payment and Settlement System (PAPSS), launched in January 2022 by the African Union and Afreximbank, was built specifically to let traders settle in local currencies instead — it now has more than 115 commercial banks connected, with a similar number in the pipeline.
Afreximbank has set a goal of doubling intra-African trade financing to $40 billion by 2026. But adoption among small and medium traders, the people who most need it, is still gradual.
4. Information Gap. A manufacturer in one country frequently has no reliable way of knowing who needs their product 800 kilometers away. Market data connecting African buyers and sellers to each other remains thin compared to the data available for trading with partners overseas.
5. Policy Misalignment. Energy, telecoms, and migration policy still aren’t harmonized across most of the continent. It’s difficult to trade freely across a border where people and electricity can’t move freely too.
4. Implications for Africa’s People
This isn’t only a GDP story. For youth: Manufacturing and agro-processing are among the largest employers of young people on the continent. Without regional markets to sell into, factories stay small and often informal. With them, there’s a real path to scale — and to the kind of job creation Africa’s youth bulge will demand over the next two decades.
For women: Women make up an estimated 70% of informal cross-border traders in Africa.
They routinely face harassment, delays, and confiscation of goods at borders that weren’t designed with them in mind. Formalizing trade corridors and simplifying cross-border payment systems would directly benefit the group doing much of the continent’s day-to-day trading work.
For food security: Africa imports an estimated $50 billion in food every year, even as roughly 30% of the food it produces is lost after harvest, largely due to weak storage and cold-chain infrastructure. Better links between surplus-producing regions and food-deficit regions could cut both the import bill and the waste at the same time.
For sovereignty: When Africa trades primarily with itself, it has more room to set its own standards, prices, and rules. When it mainly exports raw materials and imports finished goods, it accepts prices and terms set somewhere else.
5. The Agenda That Must Be Taken Seriously
1. Build corridors, not just roads. Prioritize a handful of trans-African trade corridors with one-stop border posts, digital customs processing, and functioning cold chains.
Measure progress in hours saved at the border, not just kilometers of new asphalt.
2. Scale up the Pan-African Payment and Settlement System. Push adoption of PAPSS well beyond the current base of connected banks, with real outreach to the small traders — many of them women — who are least likely to have heard of it, let alone used it.
The goal should be to meaningfully cut into the roughly 80% of intra-African trade still priced and settled in dollars.
3. Harmonize standards and digital trade rules. Work toward one food-safety certificate, one e-commerce rulebook, and one digital identity system for cross-border traders, rather than 40-plus separate national regimes.
4. Finance SMEs and women traders directly. Expand dedicated funding for working capital, warehousing, and logistics aimed specifically at small manufacturers and the informal traders who make up the bulk of actual cross-border commerce today.
5. Build real data and market linkages. A public, continent-wide platform mapping
African buyers, sellers, and logistics providers in something close to real time would close much of the information gap that keeps regional supply chains from forming in the first place.
6. Conclusion
Africa doesn’t have a trade problem. It has an integration problem.
The continent has the land, the labor, the minerals, and — increasingly — the markets. What it’s missing is the connective tissue: the roads, the payment rails, the shared rules, and the political will to prioritize African-to-African trade the way governments currently prioritize trade with the rest of the world.
Treating intra-African trade as a “nice to have” is a strategic mistake, not a neutral one. Over the next twenty years, the fastest-growing African economies are likely to be the ones that sell to their neighbors first and to the rest of the world second.
The agenda is clear. Much of the infrastructure to act on it — AfCFTA, PAPSS, the Guided Trade Initiative already piloting real trade under AfCFTA rules in 35 countries — already exists. What’s missing is urgency.If Africa waits for the rest of the world to take this seriously, it will wait indefinitely. Africans have to take it seriously first.
“A continent that cannot trade with itself cannot compete with anyone else.”
References
1. African Union Commission. AfCFTA Implementation Report, 2025.
2. UN Economic Commission for Africa. Economic Report on Africa 2025, March 2025.
3. World Bank. Africa’s Infrastructure: A Time for Transformation, 2023.
4. Afreximbank. African Trade Report 2025.
5. Brookings Institution. Intra-African Trade and Its Potential to Accelerate Progress Toward
the SDGs, January 2025.
6. ISS African Futures. Africa AfCFTA Futures.
7. Trade Unions in AfCFTA. A Five-Year Review of the AfCFTA Through a Trade Union Lens,
2025.
8. Cameroon Economic Policy Institute. Economic Implications of PAPSS on Intra-African Trade, December 2025
