Africa builds a continental economy
Amid global trade shocks, 54 nations boost commercial ties among themselves to achieve self-reliance and to lessen trade dependence on non-African countries.
This bridge connecting the West African countries of Gambia and Senegal was inaugurated in 2019, the same year that a continental free trade pact was established. As African nations seek to boost intra-African trade, such infrastructure is key.
AP/file
As the world鈥檚 second-largest continent, Africa has more regional trading blocs than any other (about 30). In dollar value, two of the blocs are among the world鈥檚 top 10. Yet 80% of African exports flow not to neighboring nations but to countries elsewhere around the globe.
That鈥檚 changing. Especially as aid cuts and tariff increases by the United States have pushed many African governments to accelerate their economies and trade with each other. That has put a renewed focus on an ambitious continent-wide, free-trade agreement that鈥檚 been in the works for more than five years.
鈥淎frica has learned to stand on its own two feet. ... We are learning to industrialise, to create jobs, to innovate,鈥� said Jane Osei, head of the African Investment Network. Speaking to African Business magazine in Washington this week, she framed the rollback of aid and preferential trade as giving Africa a certain 鈥渋ndependence鈥� that provides 鈥渙pportunity within the challenge.鈥�
The African Continental Free Trade Area (AfCFTA) is helping unlock some of that opportunity. Since its 2019 launch, 54 countries have signed on. That鈥檚 double the European Union鈥檚 membership and almost four times the EU鈥檚 population. During a pilot phase of the pact, a few countries have traded manufactured items as well as raw materials, while working to align payment and customs policies. This month, Ethiopia shipped goods under the pact for the first time while Namibia did the same in June.
鈥淭hese steps demonstrate a growing commitment to the vision of a single continental market,鈥� states GIS, a European-based think tank, describing it as 鈥渁 shield against external shocks鈥� and 鈥渁 vehicle for unlocking Africa鈥檚 full economic potential.鈥�
Much of this potential lies in the size of Africa鈥檚 market (with a population of over 1.5 billion) and among the thousands of small businesses that form the backbone of its economies. Intra-African trade grew to $208 billion in 2024, up 7.7 %from the previous year. Small producers traded a larger share of their products within Africa than larger firms. Expecting continued growth, global shipping giant DHL announced this week that it will expand services across Africa.
Kenyan statesman Raila Odinga, who passed away Wednesday, was a proponent for African self-reliance and economic integration. But he emphasized the need for transparent, democratic governance, which is still rare on the continent.
Ultimately, as AfCFTA Secretary General Wamkele Mene said on a Brookings Institution podcast this year, 鈥淲e have to ... create the conditions for our development to take place. ... Nobody is going to develop our continent except ourselves.鈥�