The African Continental Free Trade Area (AfCFTA) is a significant trade agreement aimed at creating a single, unified market for goods and services across the African continent. By bringing together the 55 member states of the African Union, it represents the largest free trade area in the world by number of participating countries.

Having come into effect in 2021, the core objective of the AfCFTA is to boost intra-African trade by progressively eliminating 90% of tariffs and reducing non-tariff barriers. The agreement seeks to enhance economic diversification and industrialisation, fostering a more competitive and integrated continental economy. Ultimately, the AfCFTA is designed to strengthen Africa’s position in the global marketplace and drive sustainable economic growth and development for its population.

By 2045, it is projected to boost intra-African trade by 45%, with significant growth in manufacturing, agro-processing, and services, while raising Africa's GDP by 1.2% and welfare by 0.9%.

For middle market businesses, this means:

  • Market access: Direct routes to 1.3 billion consumers without traditional trade barriers
  • Supply chain optimisation: Regional sourcing opportunities, reducing costs and complexity
  • Competitive positioning: Early movers gain substantial advantages in newly integrated markets 


 

“The Africa Continental Free Trade Area (AfCFTA), once fully actualised, has the potential to deliver significant economic and social benefits to its people”

George Mutua
Partner, Kenya

However, persistent challenges such as high inflation, fiscal deficits, and unsustainable debt levels threaten to undermine the economic and market gains that AfCFTA hopes to deliver. The United Nations Economic Commission for Africa’s (UNECA) 2025 economic report highlights that, although the continent’s debt-to-GDP ratio is expected to decrease from 67.3% in 2023 to 62.1% by 2025, the burden of high debt servicing costs continues to redirect resources away from essential development priorities. 

Unlocking the AfCFTA’s full potential through investment

Climate change further compounds these challenges, with annual economic losses currently estimated at $7 to $15 billion and projected to escalate to $50 billion by 2030. The AfCFTA offers a pathway to mitigate these impacts through green industrialisation and investments in renewable energy, positioning Africa as a leader in climate-proofed development strategies.

To fully leverage the AfCFTA’s potential, UNECA estimates $120.83 billion in transport infrastructure investment will be required by 2030, alongside regulatory reforms to enhance market access and foster innovation. Trade facilitation measures, such as harmonising customs procedures and reducing non-tariff barriers, will be critical in unlocking the full benefits of the agreement.