Intra-African Trade Nears $230bn Milestone On AfCFTA Boost

Intra-African trade is projected to reach $230bn by 2026, driven by the accelerated implementation of the African Continental Free Trade Area (AfCFTA), according to a new report by the African Export-Import Bank (Afreximbank).

The report highlights growing regional integration as a key pillar supporting Africa’s economic resilience amid an increasingly uncertain global environment.

The report, titled African Trade and Economic Outlook 2026, also forecasts a 10 per cent expansion in overall continental trade this year, underscoring the strengthening momentum of economic activity across the region.

Total African trade reached approximately $1.4trn in 2025, with intra-African trade accounting for about 18 per cent of that figure, reflecting steady progress under the AfCFTA framework.

According to the report, Africa’s economic performance has remained robust despite persistent geopolitical tensions and global economic headwinds. The continent’s output grew by 4.2 per cent in 2025, an improvement from 3.4 per cent recorded in 2024.

This growth was supported by strong domestic demand, improved export performance, expansion in the services sector, and renewed investments in infrastructure.

Looking ahead, Africa’s gross domestic product (GDP) is expected to rise modestly to 4.3 per cent in 2026, before edging higher to 4.4 per cent over the medium term.

The anticipated growth trajectory will be underpinned by increasing global demand for African exports, easing inflationary pressures, and ongoing structural reforms aimed at diversifying economies across the continent.

The report further noted that non-resource-intensive economies are likely to outperform their resource-dependent counterparts, with projected growth accelerating significantly to about 7.5 per cent in 2026. This trend is expected to provide additional support to Africa’s overall economic expansion and reinforce the benefits of diversification.

Despite the positive outlook, the report cautioned that Africa’s economic landscape remains vulnerable due to its continued reliance on commodity exports, which exposes many countries to price volatility and external shocks. It emphasized the need for strategic efforts to capture more value from commodities through industrialisation and value addition.

The study examined global demand trends, commodity price fluctuations, and the structure of Africa’s trade, highlighting the critical role of regional integration in boosting value chains across sectors such as agro-processing, pharmaceuticals, automotive manufacturing, energy, and digital services.

Group Chief Economist and Managing Director of Research at Afreximbank, Yemi Kale, described AfCFTA as more than a trade agreement, positioning it as a key economic stabilisation mechanism in a fragmenting global economy.

He noted that by expanding intra-African trade, harmonising standards, and reducing tariff and non-tariff barriers, African countries can significantly reduce their exposure to external demand shocks while strengthening regional value chains.

Kale also stressed that deeper regional trade integration does not imply a withdrawal from global markets but rather enhances Africa’s competitiveness and bargaining power within them.

However, he warned that integration alone would not be sufficient without addressing structural financing constraints. He identified trade finance as a critical link between macroeconomic policy and real sector growth, particularly in periods of global monetary tightening when liquidity constraints can hinder otherwise viable business activities.

He added that African firms, especially small and medium-sized enterprises (SMEs), are disproportionately affected by trade finance gaps, making it imperative to strengthen the continent’s financial architecture to support industrialisation, trade expansion, and job creation.

The report concluded that while Africa faces structural challenges, it is increasingly positioned to benefit from shifting global economic dynamics.

By leveraging regional integration, strengthening financial systems, and advancing economic diversification, the continent can unlock new growth opportunities and solidify its role in the global economy.