African international locations undermine their financial progress by prioritising commerce with Europe and the US over regional markets.
How will we be sure that African international locations commerce amongst themselves? asks Dr. Phenyo Butale, Botswana’s Minister of Worldwide Relations.
“We [Botswana] have high-quality beef in Botswana and the North West province, we export it to the European Union, but Angola and the Democratic Republic of the Congo purchase their beef from Brazil. Does that make sense? It doesn’t,” says Dr. Butale.
Regardless of its huge assets and manufacturing capability, regional commerce in Africa stays low with many economies relying closely on abroad markets. This state of affairs has prompted Botswana to boost the alarm about low ranges of intra-African commerce.
“It’s disheartening that Africa continues to be unable to grasp commerce amongst its international locations,” stated Dr Phenyo Butale, Botswana’s Minister of Worldwide Relations, delivering a lecture in honour of the late South African Deputy International Affairs Minister Dr Aziz Pahad on the North-West College (NWU) on 25 February 2025.
Emphasising the necessity for stronger financial ties amongst African nations, Dr Butale questioned why international locations proceed to import items available throughout the continent.
“We ought to be asking ourselves the way to make intra-Africa commerce a actuality,” he stated. “How will we be sure that African international locations commerce amongst themselves? We now have high-quality beef in Botswana and the North West province, we export it to the European Union, but Angola and the Democratic Republic of the Congo purchase their beef from Brazil. Does that make sense? It doesn’t.”
His remarks highlighted issues that African international locations undermine their financial progress by prioritising commerce with Europe and the US over regional markets. Some argue that this observe contributes to financial stagnation.
Dr Butale additionally mirrored on the diplomatic legacy of Dr Aziz Pahad who performed a key position in shaping Africa’s overseas coverage via establishments such because the African Union and the Southern African Improvement Group.
“Dr Pahad understood that for South Africa to thrive, Africa should thrive. His diplomatic acumen and strategic engagement served as a guiding gentle. He taught us that dialogue, not the barrel of a gun, is the surest technique to resolve battle.”
He added that the decision for elevated intra-African commerce comes amid broader efforts to implement the African Continental Free Commerce Space settlement, which goals to create a unified market. Nevertheless, logistical, regulatory and manufacturing challenges proceed to hinder its full realisation.
Dr Butale’s feedback underscore the urgency of shifting commerce priorities throughout the continent. “The query will not be whether or not Africa can commerce inside itself,” he stated. “It’s whether or not we’re keen to make it occur.”
The State of Intra-African Commerce
Intra-African commerce has traditionally been restricted, accounting for about 15 per cent of the continent’s complete commerce, considerably decrease than intra-regional commerce figures in Europe and Asia.
To handle this disparity and foster financial integration, the African Continental Free Commerce Space (AfCFTA) was established in 2019, aiming to create the world’s largest free commerce space by connecting 54 of the 55 African Union member states.
As of April final 12 months, the AfCFTA entered its operational part, marked by the institution of guidelines of origin, 90 per cent tariff liberalization, a web-based mechanism to report non-tariff obstacles, a Pan-African fee and settlement system, and the African Commerce Observatory portal. These developments are designed to streamline commerce processes and improve transparency throughout the continent.
Affect on Key Sectors
The vitality sector stands to learn considerably from the AfCFTA. The settlement is anticipated to drive funding in Africa’s vitality infrastructure, notably in nations like South Africa, Ghana, and Kenya, that are experiencing excessive charges of urbanization and electrification.
By encouraging the event of cross-border infrastructure and renewable vitality initiatives, the AfCFTA positions international locations comparable to South Africa, Nigeria, and Egypt to increase their vitality exports whereas boosting intra-African commerce.
Regardless of these developments, a number of challenges nonetheless face intra-African Commerce. They embody:–
Infrastructure Deficits: Many African nations lack the mandatory infrastructure to help seamless commerce, together with environment friendly transportation networks and dependable vitality provides.
Regulatory Boundaries: Numerous regulatory environments and non-tariff obstacles can impede the free stream of products and companies throughout borders.
Restricted Free Motion: Touring throughout Africa with a home passport stays difficult on account of in depth visa necessities and bureaucratic hurdles. This challenge considerably hinders intra-African commerce and cultural trade. Whereas the AfCFTA and the Free Motion of Individuals Protocol purpose to handle this, solely a small variety of international locations have ratified these agreements, and only a few provide visa-free journey to all African nationals.
Future Outlook
The AfCFTA goals to extend intra-African commerce to 38 per cent by 2030, cut back poverty for 30 million folks, and enhance the continent’s GDP by 7 per cent by 2035.
Reaching these targets requires addressing the aforementioned challenges via concerted efforts in infrastructure growth, regulatory harmonization, and insurance policies selling the free motion of individuals. World help for the AfCFTA, together with initiatives from worldwide companions, signifies a promising outlook for Africa’s financial integration and growth.
In abstract, whereas intra-African commerce has traditionally been restricted, the implementation of the AfCFTA marks a big step towards financial integration. By addressing present challenges and capitalizing on alternatives in key sectors like vitality, the continent is poised to reinforce intra-regional commerce and obtain sustainable financial progress.
Learn additionally: AfCFTA’s promise: liberating Africa from the chains of uncooked materials export
