By: ThinkBusiness Africa
LAGOS, Nigeria — While intra-African trade saw a significant $220 billion rebound in 2024, systemic supply-chain failures continue to cap the continent’s economic potential.
Speaking at the African Business Convention (ABC) on Tuesday, Wamkele Mene, Secretary General of the African Continental Free Trade Area (AfCFTA), warned that despite the trade body’s mandate, infrastructure gaps and geopolitical shifts remain ‘heavy bottlenecks’ for the private sector.
Addressing industry leaders under the theme “Africa Grow,” Mene emphasized that while the private sector is the primary engine of regional trade, it is being throttled by a lack of reliable power and fragmented transportation logistics.
“Even with a trade arrangement in place, if you do not have supply-chain networks, the logistics and transport sectors cannot help the private sector move fast enough,” Mene stated. He illustrated the point with a stark example: “If milk from Uganda cannot move seamlessly to Nigeria, the trade agreement will not succeed, regardless of how well-drafted the document is.”
The data supports this concern. While the AfCFTA aims to boost intra-African trade by over 50%, roughly 40% of the continent’s roads remain in poor condition. In some nations, the cost of simply maintaining existing infrastructure consumes up to 3% of annual GDP.
Mene further highlighted that security checkpoints and informal tolls along major corridors—such as the Abidjan-Lagos route—effectively act as a “private tax.” These delays and unofficial costs often double the price of transport before a product reaches its destination. To combat this, he urged African governments to go beyond signing agreements and prioritize the enforcement of local trade legislation that aligns with AfCFTA protocols.
To address these systemic gaps, the AfCFTA is currently collaborating with the African Export-Import Bank (Afreximbank) and the African Development Bank (AfDB) to modernize supply-chain networks specifically tailored for private sector needs.
Echoing Mene’s call for structural stability, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun—represented by Permanent Secretary Raymond Omenka Omachi—asserted that growth must be domestically driven.
Edun highlighted that recent Nigerian reforms, including the removal of fuel subsidies and the unification of the foreign exchange market, were designed to create a level playing field. “These reforms are not ends in themselves,” Edun stated. “They are about building a competitive economy where effort is rewarded, capital is productive, and opportunity is broad-based.”
The urgency for these reforms is underscored by the resilience of small and medium enterprises (SMEs). According to Afreximbank’s 2024 trade report, intra-African trade grew by 12.4% last year, largely driven by SMEs.
Accounting for 90% of all businesses and 80% of employment in Africa, SMEs have become the primary “lever” for trade recovery. The AfCFTA has now moved from policy to practice to support this momentum, specifically through the Guided Trade Initiative, which currently sees 37 countries trading under a unified regulatory framework.
