Africa’s fragmented supply chains are leaving businesses exposed to disruptions and forcing consumers to import products that could be produced or processed within the continent, highlighting the economic case for faster implementation of the African Continental Free Trade Area (AfCFTA).
A factory employing about 700 people, mostly women, was forced to halt operations for three months after Russia’s war in Ukraine disrupted supplies of vehicle wiring harnesses, according to an account presented by Cynthia Gnassingbe-Essonam, Director of Private Sector Engagement and Communications at the AfCFTA Secretariat.
The harnesses were produced using copper from Zambia and the Democratic Republic of Congo that was exported to Ukraine for processing before returning to Africa as a vehicle component. The disruption demonstrated how African commodities can travel outside the continent for processing before being re-imported as higher-value manufactured goods, leaving African manufacturers vulnerable to disruptions far beyond their markets.
Gnassingbe-Essonam recounted the example during a working session with Somali businesses in Mogadishu on Aug. 18, where AfCFTA officials discussed how the continental trade agreement can help businesses build more integrated regional supply chains.
The example underscores the commercial opportunity behind the AfCFTA: retaining more stages of production within Africa could reduce exposure to external supply shocks while creating opportunities for manufacturers, logistics companies, processors and suppliers across the continent.
Trade Opportunities Remain Fragmented
The same challenge is visible in food markets, where consumer demand exists but regional supply chains remain poorly organised.
Gnassingbe-Essonam cited her experience in Accra, where imported beef from New Zealand, Australia and France is sold at high prices even though Botswana produces beef and Somalia has a livestock industry capable of supplying camel meat.
“The demand exists. The supply is simply not organised across the continent.” For businesses, the issue is less about creating new demand than connecting producers with markets through efficient trade, logistics, standards and financing systems.
The working session brought together the Somali Chamber of Commerce and Industry, the Somali Manufacturers Association and private enterprises, with businesses raising questions about export readiness, banking, support for women and young entrepreneurs and differences in the pace of implementation between countries.
AfCFTA officials addressed issues including trade in goods, services, investment, intellectual property and digital trade.
Somalia Seeks First AfCFTA Consignment
Somalia is seeking to move from participation in the continental trade framework to actual commercial shipments.
The country already has tariff concessions covering the 90% category through the East African Community, according to the account. The AfCFTA Secretariat will work with Somalia toward its first consignment under the agreement, demonstrating the process from production to shipment.
For livestock exporters, AfCFTA officials emphasised that competitiveness begins with meeting buyer requirements.
Sanitary standards and abattoir requirements must be addressed first, followed by opportunities to generate additional revenue from hides and other animal by-products, including materials used in pharmaceutical manufacturing.
Location also matters. Producers operating close to ports can remove a significant portion of transport costs compared with competitors shipping from Europe, according to the discussion.
That creates an opportunity for Somalia and other African producers to compete not only through production costs but also through proximity to regional and international markets.
From Raw Materials to Regional Manufacturing
The wiring-harness example illustrates the broader economic challenge facing Africa: the continent possesses critical raw materials and production capacity but often captures a smaller share of the value created along global supply chains.
Copper produced in Zambia and the Democratic Republic of Congo can become significantly more valuable after processing and manufacturing into components. When those stages take place outside Africa, African economies lose potential manufacturing activity, supplier contracts and jobs.
The AfCFTA seeks to make it easier for businesses to build those connections across borders by creating a larger integrated market.
For companies, the potential benefit extends beyond tariff reductions. A more connected continental market could support larger production runs, justify investment in processing and manufacturing capacity and make it easier for businesses to source inputs and sell finished products across African markets.
The Somali session also highlighted the role of financial institutions in supporting that transition, with banking representatives asking what the agreement means for their role in facilitating cross-border commerce.
The challenge now is converting the framework into actual transactions.
For Somalia, that means completing its first AfCFTA shipment. For manufacturers elsewhere on the continent, it means building supply chains that allow African copper, agricultural products, livestock and other commodities to move through more stages of processing before reaching consumers.
The economic proposition is straightforward, Africa has the resources and the markets, but fragmented supply chains continue to prevent businesses from connecting the two efficiently.
