The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious economic undertakings in Africa’s history. Promising to reshape intra-African trade, boost economic development, and create jobs, the agreement has been celebrated as a blueprint for the continent’s economic independence.
However, seven (7) years into its implementation, critical bottlenecks are derailing its potential, hence the slow pace of a trade pact touted as a game-changer for the continent.
In an exclusive interaction with The High Street Journal as the African Continent marks the 2025 AU Day, Dr. Paul Appiah Konadu, an economist at Pentecost University, detailed the main challenges slowing down AfCFTA’s progress and offered recommendations to get the pact back on track.
Infrastructure Gaps and High Trade Costs
Dr. Konadu identified infrastructure as the foremost obstacle. The continent, he says has very large infrastructure gaps and high trade transaction costs, which pose challenges to trade in Africa. The poor quality of road networks and the scarcity of efficient transport corridors make the movement of goods across the continent costly and inefficient.
Even the aviation sector, which could have offered quicker cross-border movement, remains underdeveloped. This, he says, increases the cost of traveling on the continent.
“Sometimes, even to travel from West Africa to North Africa, you have to take an airline that will take you to Europe before you are brought back to Africa. That is the kind of situation we find ourselves in,” Dr. Konadu noted.
The prohibitively high cost of air travel further discourages businesses from exploring opportunities beyond their borders. “Travelling by air in Africa is very expensive… In Europe, you can fly two hours for 10 euros or less. In Africa, it is very expensive, and it is not helping in terms of business.”
Underdeveloped Payment Systems
Intra-African money transfers present another major hurdle. Dr. Konadu observed that “to transfer money from Ghana to Nigeria is a problem. To transfer money from Ghana to Kenya is a challenge.” The lack of efficient and affordable cross-border payment systems increases the cost of doing business, especially for small enterprises that cannot absorb high transaction fees.
He explained that Africa’s transfer systems are more optimized for external partners like America, Europe, and China, and not internally: “Payment systems within Africa have not been developed to the point where we can facilitate trade with little stress.”
Non-Tariff Barriers and Border Inefficiencies
The AfCFTA policy, while sound on paper, suffers from significant implementation challenges at Africa’s borders. According to Dr. Konadu, “AfCFTA requires efforts to reduce non-tariff trade barriers, streamlining processes, and upgrading our infrastructure.”
He says excessive bureaucracy, corruption, and slow clearance processes remain entrenched at border posts.
He shared the burden placed on African traders: “If a businessman has to pay his way through the border, that affects profit margins. That affects the profitability of cross-border trade. That, to a large extent, may discourage especially small and medium-scale enterprises from thinking of cross-border trade through the AfCFTA platform.”
Lack of a Common Currency
Currency incompatibility adds another layer of complexity. In contrast to Europe, where the euro facilitates seamless trade across nations, African currencies are limited in reach and acceptability. “In Europe now, because of the euro, one can move from one country to the other. And you would not have to worry with exchange rate losses,” Dr. Konadu stated.
He shared multiple real-life examples to drive the point home: “You take your cedi to Nigeria and it is as jolly as a paper… The last time I was in Nigeria and I wanted to change my cedi at the airport, and I went to the Forex Bureau. And they were only changing dollars, pounds sterling, the euro, and the South African rand. There was no ability to change the cedi.”
The Need for Action
Despite these formidable challenges, Dr. Konadu remains optimistic. He believes that AfCFTA can still achieve its grand vision if member states urgently address the existing bottlenecks. He advocates for massive investments in infrastructure, a robust and unified payment system, streamlined border operations, and the creation of a common African currency.
“If we are able to address all these challenges, I think AfCFTA will be a very important platform for the socio-economic transformation of Africa, enhancing income growth and productivity, creating employment for our youth and reducing our dependence on colonial masters,” he concluded.
