The African Continental Free Trade Area (AfCFTA), a flagship project of the African Union designed to create the world’s largest single market, stands at a critical crossroads.
While its potential to revolutionize the continent’s economic landscape is undisputed, a recent assessment by the World Bank suggests that the path to prosperity will be a long-term journey.
According to the April 2026 Africa Economic Update, the AfCFTA could potentially lift up to 40 million people out of extreme poverty and boost real incomes by 7 to 9% by 2035.
However, five years after its official launch in January 2021, the report warns that the full dividends of the agreement remain largely untapped due to systemic inefficiencies and a lack of deep-seated institutional reform.
The World Bank’s findings highlight a sobering reality: reducing tariffs is only a small piece of the puzzle. The most significant hurdles to intra-regional trade are not the taxes paid at the border, but the astronomical “internal trade costs” that plague the continent. The report stated that while tariff reductions under the AfCFTA will help intra-regional trade, the most significant constraints stem from these domestic costs.
These barriers are driven by a combination of dilapidated transport networks, inefficient customs procedures, and a lack of digital integration.
For many African businesses, it remains cheaper and faster to ship goods to Europe or Asia than to a neighboring country. The report identifies poor logistics systems and high domestic costs for finance as primary “growth killers,” noting that without a concerted effort to modernize regional trade corridors, the dream of a seamless single market will remain out of reach.
To bridge this gap, the World Bank is calling for an aggressive shift toward digitalization and the harmonization of regional systems. Automated trading platforms and digital customs clearance are no longer luxuries; they are essential tools for reducing the time and corruption often associated with physical border crossings.
Furthermore, the report emphasizes that the AfCFTA’s success hinges on “strong leadership from key countries.” This involves more than just attending summits; it requires the strict enforcement of trade commitments and the removal of non-tariff barriers, such as selective export bans, which continue to distort regional markets and slow overall progress.
Looking toward the next phase of the agreement, experts suggest that focus must shift toward intellectual property rights, competition policy, and investment rules.
Crucially, the World Bank recommends increasing the participation of women and young people in trade to ensure that the economic gains are inclusive and sustainable. Despite the optimistic long-term projections, the World Bank maintains a cautious tone, noting that progress will likely be gradual.
