The African Continental Free Trade Area (AfCFTA), which came into force on 1 January 2021 with 54 member states, is the world’s largest free trade area by number of countries. It aims to eliminate tariffs and other barriers to spur trade, industrialisation and value addition beyond raw materials. The agreement unites some 1.3 billion people with a combined GDP of about US$3.4 trillion.
According to the African Trade Report 2025, intra-African trade rose by 12.4 per cent to US$220.3 billion in 2024. In a world marked by protectionism and new tariffs, particularly from the United States, AfCFTA offers African nations a path to diversify their markets and reduce dependence on traditional export destinations.
The World Bank estimates that AfCFTA could lift 30 million people out of extreme poverty and increase the incomes of 68 million more who live on less than US$5.50 a day. Cutting red tape, reducing tariffs and removing non-tariff barriers are central to this ambition. Full implementation could generate up to US$292 billion in income gains, while driving deep reforms needed for long-term growth.
Unlocking New Markets
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AfCFTA is poised to reshape African markets by opening up previously inaccessible opportunities and boosting production as companies tap into new demand. Success, however, hinges on key enablers: political will, active participation from both public and private players, and supportive legal frameworks.
Financing Critical Sectors
The AfCFTA Secretariat has signed multiple memoranda of understanding with financial institutions to deepen integration. For example, the African Development Bank, AfCFTA Secretariat and Africa50 signed a landmark deal to identify, design and maintain critical infrastructure projects that will enhance intra-African trade, accelerate regional integration and drive digital transformation.
Simplifying Payments
Afreximbank and AfCFTA launched the Pan-African Payment and Settlement System (PAPSS), a “revolutionary” platform enabling instant cross-border payments in local currencies. This reduces dependence on hard currencies, cuts transaction costs and supports the broader implementation of AfCFTA.
Kenya’s Role and the Road Ahead
Kenya was among the first seven countries to begin trading under the AfCFTA framework. Although volumes remain small, Regional Economic Communities such as the EAC are seen as building blocks of implementation. Under the agreement, 90 per cent of tariff lines will be liberalised within 5-10 years, with another 7 per cent — considered sensitive — following within 10-13 years.
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Small and medium-sized businesses are the backbone of African economies and employment. Sustained support will be needed to ensure SMEs can seize the opportunities created by AfCFTA.
By and large, the sky is clear for AfCFTA’s take-off. With all hands on deck, the agreement offers Africa a rare chance to transform its economies and deliver shared prosperity.
Robert Maina is an Associate Director at Ernst & Young LLP (EY). The views expressed herein are not necessarily those of EY.
