Africa’s contribution to global trade stands at a modest 3%, a number that falls too short of the continent’s immense potential. However, a closer look at intra-African trade reveals a more concerning trend: a decline from 14.5% in 2021 to 13.7% in 2022.
This tells a powerful and puzzling story; it is currently easier for Africa to trade with the rest of the world than it is for its own member states to trade with each other.
This paradoxical reality, according to John Macharia, the Country Director, AGRA Kenya, is vividly illustrated by the fact that Kenyan flowers and tea are often shipped to Europe, only to find their way back to shelves in West Africa.
Barriers to Intra-African Trade
Macharia, whose comments come shortly after Uganda and Kenya signed a bilateral agreement to reduce border tariffs, contends that the low level of intra-African trade is not an accident but a result of persistent and complex barriers.
He argues that while tariffs remain a challenge, it is often the non-tariff barriers (NTBs) that present the most significant hurdles. These include:
Complex Customs Procedures
He notes that complex and unharmonised customs regulations, coupled with bureaucratic red tape at borders, lead to excessive delays and increased costs for traders. The lack of standardised documentation and certification requirements can halt goods for days or weeks, leading to perishability in some cases.
Poor Infrastructure
A lack of integrated road, rail, and port networks makes cross-border transport slow and expensive. This means goods from a neighbouring country might have to travel thousands of miles through a third continent to reach their destination.
Restrictive Regulations
Macharia argues that varying product standards, licensing requirements, and sanitary and phytosanitary measures across countries create significant obstacles for businesses trying to scale up trade.
These invisible walls make regional trade uncompetitive and discourage businesses from exploring neighbouring markets, channelling their efforts toward more accessible global markets instead.
Leveraging the AfCFTA and Bilateral Agreements
To overcome these challenges, Africa is turning to a powerful two-pronged strategy. The primary vehicle is the African Continental Free Trade Area (AfCFTA), a landmark agreement aimed at creating a single, integrated market of over 1.3 billion people.
The AfCFTA’s objective is to progressively eliminate tariffs on 90% of goods and reduce non-tariff barriers, thereby fostering trade in value-added goods, promoting industrial development, and creating regional value chains.
Bilateral Agreements Are Key
Macharia explains that while the AfCFTA provides the continental framework, bilateral agreements offer a tangible blueprint for its implementation.
For instance, the recent agreement between Kenya and Uganda to remove tariffs and non-tariff barriers is a prime example of this pragmatic approach.
This kind of bilateral cooperation, according to Macharia, demonstrates political will and provides a model for other countries to follow, proving that the vision of a unified African market can be realised one step at a time.
By tackling specific trade hurdles between neighbours, therefore, these agreements can build momentum and confidence in the larger continental project.
The journey toward a fully integrated African market is long, but the tools and the political will are in place.
As Macharia reiterates, “By systematically dismantling trade barriers and leveraging both continent-wide and bilateral agreements, Africa can unlock its immense potential, diversify its economies, and foster the kind of inclusive, sustainable growth that will benefit all its people.”