The AfCFTA at Five: Promise vs. Reality for African Businesses

Five years after the African Continental Free Trade Area (AfCFTA) began operations, the promised transformation for businesses trading across the continent remains largely unrealized, according to Adesoji Adesugba in ThisDay.

While the AfCFTA represents a historic agreement aiming to create the world's largest single market by uniting 54 economies and 1.4 billion people, its impact on the ground for many traders and manufacturers has been minimal. The gap between the grand agreement and the daily realities of doing business is a critical concern for trade ministers.

The potential benefits are enormous: the World Bank estimates the AfCFTA could raise continental income by hundreds of billions of dollars and lift tens of millions out of poverty within a decade. Crucially, the largest gains are expected not from tariff reductions but from cutting the everyday costs of moving goods across borders.

Intra-African trade currently stands at around 15%, significantly lower than figures in Asia (nearly 60%) and the European Union (over two-thirds). This disparity is largely due to non-tariff barriers, which a World Bank estimate suggests can be equivalent to a 292% tariff. Road transport costs can account for nearly a third of the price of goods traded within Africa, compared to about 7% for external trade. Delays at border posts can cost traders more than the tariffs the AfCFTA aims to eliminate.

Adesugba argues that the focus should shift from signing protocols to tangible improvements: faster container movement, lower costs for firms, and simpler, more predictable cross-border trade. Businesses need operational efficiency, not just ceremonial agreements. The success of the AfCFTA hinges on its practical implementation and the reduction of these hidden trade barriers.