Wamkele Mene, the Secretary-General spearheading the African Continental Free Trade Area (AfCFTA), is growing increasingly concerned about the future of the initiative as political instability grips parts of the continent. “The foundation of economic integration and the free movement of goods is frequently disrupted by regional conflicts,” says Mene. Recent political upheavals in Burkina Faso, Mali, and Niger, coupled with these nations’ withdrawal from the Economic Community of West African States (ECOWAS), have significantly hampered trade flows in West Africa, threatening the broader goals of AfCFTA.

Yet Mene remains optimistic. He points to the African Union’s "Silencing the Guns" initiative, which aims to quell regional conflicts and foster political stability, a crucial prerequisite for the success of AfCFTA. “While flawless political relations aren’t a necessity for trade, they do greatly enhance the efficiency and benefits of economic exchange,” Mene emphasizes. “Ongoing conflicts pose a serious risk to the vision of a unified African market under AfCFTA.”

AfCFTA, which was officially launched in 2021, holds the promise of reshaping African trade by reducing the continent's dependence on imports from outside Africa and bolstering intra-continental trade. By fostering the growth of regional value chains, AfCFTA is expected to attract inward investment, spur industrialization, and create employment, ultimately making Africa more self-reliant.

Mene envisions a future where African industries produce goods for a massive unified market spanning 54 countries and serving 1.4 billion consumers. “AfCFTA will stimulate entrepreneurship and open up vast opportunities across Africa, especially in manufacturing and tradeable services,” he says.

The South African-born trade diplomat, currently based at AfCFTA's headquarters in Accra, Ghana, was re-appointed for a second four-year term earlier this year, giving him the opportunity to further build upon the foundation of what is poised to become the world's largest free trade area. During his tenure, he has been instrumental in removing barriers that have long constrained Africa’s economic potential, including the elimination of import tariffs on 88.3% of the 5,000 goods traded across the continent.

“Trade under AfCFTA is now possible for the vast majority of goods, with agreed rules of origin in place,” Mene said at the AfCFTA Business Forum in Cape Town last year. However, negotiations on rules for sensitive sectors like textiles and automotive products are ongoing.

South Africa, historically an exporter of raw materials, is looking to AfCFTA to diversify its export portfolio and penetrate new African markets. The country aims to increase the share of manufactured goods in its export basket. Luthando Vuba, Head of Trade Development at Standard Bank, believes sectors such as agriculture, automotive, steel, chemicals, and entertainment are particularly well-positioned to capitalize on the opportunities AfCFTA presents.

According to Vuba, South Africa can also use AfCFTA to mitigate risks in its import supply chains. “Currently, South Africa imports 90% of its rice from India and Thailand. This presents a significant supply chain risk, which could be mitigated by importing from within Africa—countries like Nigeria, Egypt, and Tanzania,” he says.

A joint study by McKinsey & Company and the Brookings Institution estimates that by 2030, annual spending by African consumers and businesses will reach $6.66 trillion, up from $4 trillion in 2015. The World Bank projects that AfCFTA could increase intra-African exports by more than 81%, potentially lifting 30 million people out of extreme poverty.

Several African countries, including South Africa, have already begun trading under the new agreement. In January, the first shipment of South African exports under AfCFTA left the Port of Durban bound for Ghana and Kenya. The cargo included a mix of manufactured goods and agricultural products, such as refrigerators, recycled copper, smart electricity meters, pharmaceuticals, cement grinding balls, and fresh produce. Local manufacturers like Conlog and Defy Appliances were among the first to benefit from the agreement.

Historically, intra-African trade has been restricted by high tariffs, foreign exchange controls, fragmented markets, and poor infrastructure. Intra-regional trade accounts for only 18% of Africa’s total trade, far behind regions like Asia, where intra-regional trade makes up 58.5%, or the European Union, where intra-trade between member states exceeds 80%.

However, AfCFTA is beginning to address these long-standing barriers, providing momentum for the development of critical infrastructure. The introduction of a cross-border payment system that allows transactions in local currencies is a key milestone, and international banks are supporting this new era of trade. By 2030, it is estimated that 2 million trucks, 100,000 rail wagons, 250 aircraft, and over 100 vessels will be needed to support the projected growth in intra-African trade.

Despite the political and economic challenges, Mene remains confident that AfCFTA has the potential to transform Africa’s economic landscape. If the continent can overcome the headwinds of instability, Africa could realize the long-held vision of a self-reliant and economically integrated continent.

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