The African single market, five years later: non-tariff barriers and logistical weaknesses hinder its potential

Royalty-free stock photograph created by Adrian Sulyok and Unsplash.

Customs

Five years after its launch, the African Continental Free Trade Area (AfCFTA) continues to be hampered by border inefficiencies, poor transport infrastructure, and fragmented payment systems. This reality, discussed at an industry conference in Johannesburg, limits intra-continental trade and complicates the expansion strategies of key partners such as Spain.

Almost five years after its entry into force, the ambitious African Continental Free Trade Area project (AfCFTAIntra-African trade faces a harsh reality that slows its progress. The vision of a unified market of over 1.200 billion people and a combined GDP of $3,4 trillion clashes with persistent non-tariff barriers, infrastructure bottlenecks, and a complex fragmentation of payment systems. As a result, intra-African trade accounts for barely between one and 14% and an 16% of the continent's total trade, a figure far removed from the ratios close to 60% that regions like Europe or Asia present.

During a manufacturing conference held this week in JohannesburgoExperts and business leaders agreed that while the framework of the agreement is sound in theory, its practical implementation is far from optimal. "While the trade pact looks good on paper, the non-tariff barriers experienced in different parts of Africa are hindering real progress," they stated. Muntanga Lindunda, CEO of the Association of Manufacturers of ZambiaAmong the main obstacles, he cited prolonged delays at borders and limitations in cross-border payment systems.

This operational fragmentation has a direct impact on European economies, especially in Españawhose companies saw in the AfCFTA A gateway to a simplified continental market. The expectation of being able to operate under a single regulatory and logistical framework fades in the face of the need to continue navigating a patchwork of protectionist national laws and disparate customs processes. For Spanish companies with interests on the continent, this translates into higher operating costs and greater complexity in planning their supply chains.

Infrastructure and payments, the major obstacles

Lindunda He compared the situation to that of the Unión Europeawhere “measures have been implemented that allow trucks to move from border to border within the free trade area without having to stop so often and for so long.” Within the framework of AfCFTAAlthough tariffs are low or nonexistent, the problem lies in non-tariff barriers. The solution, according to experts, is for member countries to incorporate the agreement's protocols into their domestic legislation to facilitate the movement of goods.

Infrastructure is emerging as the other major challenge. "Moving around Africa is very expensive, and if people can't move easily, how can we expect goods to move?" he asked. LindundaTrade between East and West Africa, for example, is severely limited by the lack of efficient land connections. This deficiency forces exporting companies, including Spanish ones, to rely on slower and more expensive maritime routes, hindering their penetration of inland markets and concentrating commercial activity in coastal ports.

This logistical weakness is compounded by financial complexity. According to Ola OyetayoCEO of the fintech firm VertoLack of liquidity, the complexity of currency exchange, and fragmented payment systems continue to define the reality of cross-border business. In some cases, it is simpler for a company to make a payment to financial centers such as Londres o Nueva York than to settle a transaction within the continent itself. To unlock the potential of AfCFTAIt is essential to improve access to emerging market currencies and unify payment methods, a challenge that, five years later, remains pending.

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