High Trading Costs Undermining AfCFTA Objectives, Okonjo-Iweala Warns

The World Trade Organization (WTO) Director-General, Dr. Ngozi Okonjo-Iweala, has warned that high intra-African trade costs are undermining the objectives of the African Continental Free Trade Area (AfCFTA), calling for urgent reforms to make trading within the continent cheaper and more efficient.

Speaking during an interview with CNN’s Christiane Amanpour, Okonjo-Iweala revealed that it currently costs about 20 per cent more for African countries to trade with one another than with countries outside the continent, a paradox she said must be urgently addressed if the AfCFTA is to fulfill its promise of deepening regional integration and boosting industrial growth.

“It costs 20 per cent more for us to trade with each other on the continent than with others externally. Something is wrong with that. We need to bring our average costs down,” she stated.

The WTO boss lamented that despite Africa’s immense potential, structural bottlenecks such as poor infrastructure, unreliable electricity, weak logistics systems, and high transportation costs continue to constrain competitiveness and discourage intra-African commerce.

“We have to deal with several challenges. Investing in infrastructure is certainly one of them. Lack of infrastructure, ports, electricity, connectivity, is the number one issue,” she emphasized.

Okonjo-Iweala noted that Africa’s economy is projected to grow by about four percent in 2025, one percentage point above the global average, but stressed that the continent must do far more to harness its human capital and natural endowments.

Africa, she added, holds about 30 per cent of the world’s mineral resources and 67 per cent of its arable land, yet continues to struggle with productivity and trade competitiveness.

She also underscored the urgency of investing in human capital, noting that Africa’s demographic advantage could become a global game changer if properly nurtured.

“By 2050, Africa will be home to 2.5 billion people and 22 per cent of the world’s working-age population. But you can’t just say we have people, therefore we are rich.

They’ve got to be skilled. We’ve got to be up with technology and AI,” Okonjo-Iweala cautioned.

Despite current economic headwinds, the WTO Director-General expressed optimism about the growing innovation and creativity among Africa’s youth, particularly in technology-driven sectors such as fintech, agritech, health tech, and the creative industries.

“Young people in fintech are inventing new things. In agritech, we have companies helping farmers do better. In health tech and the creative industries, African music and creativity are flourishing,” she said.

“If we have young people who are this creative, how do we support them better?”

Okonjo-Iweala reaffirmed her belief in Africa’s resilience and capacity for inclusive growth, describing the continent’s youthful population as its greatest asset if adequately empowered through education, skills development, and access to digital tools.

“I’m not trying to run away from challenges, I’m just excited to be African and to be Nigerian because of what I see,” she said.

The WTO chief’s remarks come at a time when policymakers and business leaders across the continent are seeking strategies to accelerate the implementation of the AfCFTA, which aims to create the world’s largest single market, boost trade efficiency, and reduce dependence on external markets.