AfCFTA Tariff Reductions Drive 22 Percent Surge in Intra-African Trade

The African Continental Free Trade Area (AfCFTA), the world's largest free trade area by number of participating countries, has delivered its most tangible economic impact since its operational launch in January 2021. Intra-African trade rose by 22 percent in 2025 to approximately $210 billion, up from $172 billion in 2024, according to data released by the AfCFTA Secretariat in Accra. The increase, the largest year-on-year gain since the agreement's inception, follows the implementation of tariff reductions covering 90 percent of goods traded between the 36 countries that have so far submitted their tariff liberalization schedules.

The AfCFTA, which entered its operational phase in January 2021 and began formal trading under preferential tariff arrangements in 2022, now encompasses 54 of Africa's 55 countries (Eritrea being the sole exception). The agreement aims to create a single continental market for goods and services with a combined GDP of approximately $3.4 trillion and a population of 1.4 billion people. The ultimate objective is to increase intra-African trade, which historically accounted for only 15 to 18 percent of Africa's total trade -- compared to 60 percent in Europe, 40 percent in Asia, and 25 percent in Latin America.

Wamkele Mene, secretary-general of the AfCFTA Secretariat, described the 2025 trade figures as "a vindication of the political will that African leaders demonstrated in agreeing to this historic treaty." Speaking at the AfCFTA Business Forum in Cape Town on April 15, Mene stated: "We are seeing the beginning of a structural transformation in African trade. Companies across the continent are beginning to think of Africa as one market, not 54 fragmented economies. The tariff reductions have reduced the cost of trading across borders, but more importantly, they have changed the psychology of African business."

The tariff reduction schedules submitted by participating countries vary in scope and speed. Under the agreement, African countries are expected to liberalize 90 percent of tariff lines over varying timeframes: 5 years for developed countries, 10 years for developing countries, and 15 years for least developed countries. The remaining 10 percent of tariff lines can be excluded from liberalization, with 3 percent reserved for "sensitive products" that countries may protect indefinitely.

Nigeria, Africa's largest economy, submitted its tariff offer in December 2024, covering 87 percent of tariff lines with liberalization periods of 5 to 10 years. The country excluded approximately 150 tariff lines, primarily covering agricultural products including rice, poultry, and vegetable oil that the government considers strategic for food security. South Africa, the continent's most industrialized economy, has liberalized approximately 90 percent of its tariff lines but maintains protections on automotive products, textiles, and clothing.

The trade data reveals interesting patterns in the sectors benefiting most from tariff reductions. Manufactured goods showed the strongest growth, with intra-African trade in processed food and beverages rising by 34 percent, pharmaceuticals by 28 percent, and construction materials by 25 percent. Agricultural commodity trade grew by 18 percent, with significant increases in cross-border trade of coffee (from Ethiopia and Uganda to East and Southern Africa), cocoa (from West Africa), and maize (from Southern Africa to the Great Lakes region).

Trade in services, which is governed by a separate AfCFTA protocol that entered into force in 2024, has also shown strong growth. Intra-African trade in financial services rose by 20 percent, transport and logistics by 18 percent, and telecommunications by 15 percent. The protocol on the movement of business persons, which facilitates visa-free travel for African business people on short-term assignments, has been ratified by 22 countries and is credited with facilitating increased business travel and investment across the continent.

However, implementation challenges remain significant. Non-tariff barriers, including customs delays, regulatory divergences, and documentary requirements, continue to impede trade flows. The AfCFTA Secretariat estimates that non-tariff barriers cost African traders approximately $45 billion annually, representing a larger obstacle to trade than tariffs. The Secretariat has established a Non-Tariff Barriers Reporting and Monitoring Mechanism, which has received over 1,800 complaints since its launch and resolved approximately 65 percent of them.

Infrastructure deficits remain a binding constraint. The African Development Bank estimates that Africa's infrastructure gap -- in roads, railways, ports, energy, and digital connectivity -- amounts to approximately $68 billion to $108 billion annually. The Bank has committed $30 billion to infrastructure development across the continent under its African Infrastructure Investment Program, but financing needs far exceed available resources.

The Guided Trade Initiative (GTI), launched by the AfCFTA Secretariat in October 2022 to facilitate the first commercial transactions under AfCFTA preferential terms, has expanded from 7 participating countries to 28. The initiative has facilitated trade in 96 product categories, with total trade value reaching $3.8 billion by April 2026. Companies participating in the GTI have reported average tariff savings of 15 to 30 percent on traded goods.

Private sector engagement with AfCFTA has been growing. The Pan-African Business Coalition, a consortium of business associations from 38 African countries, has established an AfCFTA Business Council that provides trade facilitation services including market intelligence, customs brokerage assistance, and dispute resolution. The Council has registered over 4,200 businesses since its launch in 2024.

Professor Landry Signe, a senior fellow at the Brookings Institution's Africa Growth Initiative, noted that AfCFTA's progress, while encouraging, must be assessed against the scale of the opportunity. "Intra-African trade of $210 billion is a meaningful increase, but it still represents only about 20 percent of Africa's total trade," Signe said. "If AfCFTA achieves its full potential, intra-African trade could reach $450 billion to $600 billion by 2035, adding $450 billion to continental GDP and lifting 30 million people out of extreme poverty. The 22 percent increase we saw in 2025 is a strong start, but it is just that -- a start."

The success of AfCFTA will ultimately be determined not by the ambition of its goals but by the fidelity of its implementation. Tariff reductions are the easy part. The hard work of harmonizing regulations, building infrastructure, addressing non-tariff barriers, and creating a genuinely integrated continental market will require sustained political will, significant investment, and a level of coordination among 54 sovereign nations that Africa has rarely achieved. But the 2025 trade figures suggest that, for the first time, the trajectory is pointing in the right direction.