AfCFTA Needs Fine Tuning: DP World Study

February 11, 2025

(3 Minutes Read)

While the AfCFTA aims to create a single market across 54 countries – lowering tariffs and boosting intra-African trade – only 31 of the 48 signatories have initiated trade under the agreement. Key challenges include political instability (cited by 40% of executives) and slow implementation (32%).

Despite ongoing trade challenges, Africa’s focus on regional integration through the African Continental Free Trade Agreement (AfCFTA), along with proactive global engagement offers a roadmap to sustainable growth, according to the latest Trade in Transition study supported by DP World.

The dynamic trade landscape in Africa and progress on AfCFTA are central themes of the study, released at the World Economic Forum in Davos, last week. Commissioned by Economist Impact and supported by DP World, the research presents the perspectives of African trade experts, senior executives, and researchers to forecast the trading landscape in 2025.

It highlights a roadmap to sustainable supply chain growth – anchored by regional collaboration and proactive global engagement to source products and services from across the world. While the AfCFTA aims to create a single market across 54 countries – lowering tariffs and boosting intra-African trade – only 31 of the 48 signatories have initiated trade under the agreement. Key challenges include political instability (cited by 40% of executives) and slow implementation (32%).

Africa’s infrastructure remains a barrier to trade, yet there are promising projects underway that will start to address gaps. The Lobito Corridor railway connecting Angola to the Democratic Republic of the Congo and Zambia is expected to improve trade logistics. Similarly, the rehabilitation of the Tanzania-Zambia railway will enhance East Africa’s rail-sea transport network, facilitating cargo transport from Zambia’s mines to Tanzania’s coast.

Nearly half (46%) of the surveyed executives said they were diversifying their supplier base globally to mitigate trade risk, compared to only 16% focusing on regionalization. Although China remains Africa’s largest trading partner, countries such as India, the United Arab Emirates, and Turkey are emerging as important players in Africa, offering an array of economic partnerships.