The level of intra-African trade remains underdeveloped, accounting for just 15–17 percent of the continent’s total exports, according to a new report launched on Friday by the African Union (AU), the United Nations Economic Commission for Africa (UNECA), and the World Bank.
According to the report launched on Friday at the AU headquarters in Addis Ababa, the capital of Ethiopia, most individual African nations are too small and geographically fragmented to achieve industrial scale independently.
The report, entitled “Integrating Africa: From Threads to Hubs,” emphasised that regional integration is structurally necessary to expand market size, pool capabilities, and escape existing low-value, low-diversification capability traps.
It also urged African countries to urgently overhaul their fragmented trade models and establish integrated regional production networks to avoid economic marginalization and accelerate industrial growth.
The report underscored that Africa’s primary trade bottlenecks are not tariff barriers but regulatory fragmentation. It discovered that roughly 60 percent of total trade costs stem from behind-the-border constraints, including customs clearance inefficiencies, sub-optimal logistics services, and poorly aligned domestic regulatory frameworks.
The report further urged African governments to ensure that customs, digital data, financial payments, logistics, and institutional regulations can operate seamlessly across borders rather than solely focusing on standard tariff liberalization.
It also advised linking national industrial incentives directly with regional sourcing and exports, allowing the continent to aggregate demand and effectively build competitive cross-border regional value chains.
Highlighting a crucial alternative, the report revealed that the current state of intra-African trade offers significantly higher development returns, providing greater potential for industrial upgrading and creating vital regional jobs.
MG/as/APA