Reaping the benefits of the AfCFTA: Strengthening transport services and infrastructure for growth

A tech entrepreneur in Lagos, a coffee farmer in Ethiopia, and a fashion designer in Accra all represent the diverse business landscape across Africa. The African Continental Free Trade Area (AfCFTA) aims to facilitate seamless trade among them by reducing tariffs, simplifying customs procedures, and eliminating non-tariff barriers.

For far too long, Africa has exported its raw materials—gold, oil, cocoa—only to buy back finished goods at a premium. But what if that story changed? What if Africa kept its wealth at home, built factories, created jobs, and industrialized its economies? That’s the dream AfCFTA is bringing to life: A modern, industrialized Africa where the energy and creativity of the continent’s youth fuel innovation and growth, offering every citizen a chance at a better life.

The AfCFTA is a trade agreement designed to facilitate cross-border commerce by reducing barriers and improving market integration. By enhancing trade among African nations, it aims to promote business collaboration and establish a single market of over a billion people, increasing Africa’s participation in global trade. AfCFTA is more than an economic initiative; it is a framework for regional trade integration that advances Agenda 2063 by fostering self-sufficiency and economic growth across Africa. As the continent’s blueprint for transformation, the Agenda 2063 aims to position Africa as a global powerhouse through inclusive and sustainable development.

The agreement provides investors in African Union member states with access to a single market of 1.7 billion people and a combined GDP of $10.8 trillion at purchasing power parity as of 2025. By reducing tariff and non-tariff barriers, the AfCFTA is expected to facilitate cross-border investments and enhance economic competitiveness across the continent.

A recent World Bank study, conducted in partnership with the AfCFTA Secretariat, offers a glimpse into what full implementation could achieve by 2035. Incomes across Africa would rise by 7%, lifting over 30 million people out of extreme poverty, while wages would experience similar growth, with women experiencing an 11.2% increase and men receiving a 9.8% boost. The World Bank study also projected that foreign direct investment into Africa would rise significantly, increasing by 159% if countries expand the agreement to harmonize policies on investment, competition, e-commerce, and intellectual property rights. Additionally, Africa’s exports (excluding those from Eretria, which has not signed the agreement) to global markets are anticipated to expand by 154%, while intra-African exports (excluding Eritrea) would increase by 109%.  primarily driven by the increased production and exchange of manufactured goods. Moreover, by 2035, AfCFTA could significantly impact investment and trade dynamics in Africa, supporting industrial development and expanding market access.

Despite its potential, inadequate transport infrastructure and services could limit the benefits of this agreement. The African Development Bank estimates that about 600 million Africans lack access to electricity, underscoring the need for investments in energy infrastructure, including appropriate generation, transmission, and distribution capacity. It also estimates that an annual investment of between $130 billion and $170 billion is needed to address the infrastructural deficits on the continent.

Furthermore, for the AfCFTA to fully deliver its transformative potential, it is crucial to minimize the list of excluded and sensitive products to ensure broad-based market access. Equally important is the adoption of nonrestrictive rules of origin, which can facilitate greater regional value chain integration. Additionally, progress in services liberalization—particularly in finance, transport, and digital trade—will be key to unlocking new investment opportunities and improving efficiency across sectors. These elements, combined with infrastructure development, will determine the scale of AfCFTA’s impact on intra-African trade and economic growth.

Need for infrastructure to support the AfCFTA

A critical challenge for AfCFTA’s success is mobilizing investment finance to bridge Africa’s infrastructure deficit. Despite progress in financial system development, constraints persist. Africa’s tax-to-GDP ratio averages 16%, far below the global average of 34%, limiting public savings. Strengthening financial markets can boost private savings, yet sub-Saharan Africa’s savings rate remains 19% of GDP on average between 2010-2021, compared to 37% in East Asia in the same period. Meanwhile, development finance is declining, with additional cuts, such as USAID’s budget reductions, exacerbating the shortfall. To sustain AfCFTA’s momentum, African governments must prioritize domestic revenue mobilization, deepen financial markets, and advocate for continued donor support.

A farmer in Burundi may face difficulties in transporting produce due to inadequate roads, while an entrepreneur in Nigeria may encounter business disruptions caused by unreliable electricity. Addressing these infrastructure challenges is essential for improving economic efficiency and market access.

To fully unlock AfCFTA’s potential, Africa must prioritize investments in better infrastructure and reliable energy systems. Well-connected roads, railways, and ports can reduce transport costs and open up markets, while smart energy investments—such as expanding gas capacity and transitioning to renewable sources—can sustainably power industries, homes, and businesses.

By championing green industrialization and clean energy, Africa can achieve universal electricity access, secure clean water for livelihoods, and gain greater competitiveness in global markets. These investments would boost trade and pave the way for job creation, vibrant local economies, and a prosperous, self-reliant Africa where everyone has the resources to thrive.

AfCFTA and its implications for the demand for transport services

A truck driver in Mauritania may encounter difficulties transporting goods due to inadequate road infrastructure, while a freight train in Tanzania may face capacity constraints in meeting increasing transport demand. Such logistical challenges illustrate some of the infrastructure gaps that need to be addressed for the effective implementation of the African Continental Free Trade Area.

A study by the UN Economic Commission for Africa (UNECA) shows that AfCFTA could lead to a 28% increase in intra-African freight demand by 2030. To utilize this opportunity, the continent must urgently invest in transport infrastructure and address these critical gaps. The study also finds that more than 60,000 km of critical road links require upgrading to accommodate the anticipated growth in intra-African trade because of AfCFTA. With a median cost of $400,000 per kilometer for road construction in sub-Saharan Africa, upgrading the critical road links could cost at least $24 billion, depending on the type of upgrading required, geotechnical conditions, and other factors related to specific links. Implementing the Trans-African Highways, the Programme for Infrastructure Development in Africa, and other planned regional infrastructure projects would reduce the length of critical road links requiring upgrades by 33%, with additional resources needed to upgrade the remaining sections.

Currently, almost 77% of Africa’s freight is transported by road, while rail accounts for 0.3%. With appropriate trade-related infrastructure policies, rail’s share could increase to 7%, along with growth in maritime and air freight demand. By 2030, projections indicate that Africa will require approximately 2 million trucks, over 100,000 rail wagons, 250 aircrafts, and more than 100 vessels to support AfCFTA-related trade.

Air transport supports 8.1 million jobs and contributes $75 billion to Africa’s economy. Although Africa accounts for about 18% of the global population, its aviation industry represents only 2.1% of the global market (cargo and passenger). The COVID-19 pandemic affected the sector significantly, with airlines experiencing losses of $8.6 billion in 2021. As economic activity resumes, AfCFTA is expected to increase demand for air transport, particularly in regions such as West and Southern Africa.

To tackle these challenges, frameworks like the Yamoussoukro Declaration and the African Union’s Single African Air Transport Market (SAATM) offer pathways to liberalize air transport and improve connectivity. These initiatives align with Agenda 2063’s vision of lowering transport costs and making intra-African trade more accessible. Currently, 35 member states of the African Union (AU) have signed the Solemn Commitment to implement SAATM. Collectively, these nations represent more than 800 million people, making up 61% of Africa’s population and contributing to 89% of intra-African air transport activity.

AfCFTA is a trade agreement aimed at facilitating regional integration and economic development. To maximize its benefits, state parties to the AfCFTA should prioritize investments in roads, railways, ports, and air infrastructure. Coordinated planning and investment in transport networks can help address infrastructure gaps and improve connectivity across the continent.