The latest Rhenus warehouse in Meadowview, Johannesburg
The African Continental Free Trade Area (AfCFTA) could significantly transform Africa's economic and logistics landscape. The World Bank estimates it could boost Africa’s income by $450 billion by 2035.
The African Continental Free Trade Area (AfCFTA) represents the most ambitious economic integration initiative in Africa's history. Since becoming operational in January 2021, this landmark agreement has been steadily transforming how goods move across Africa's 55 participating countries. Creating a market with a combined GDP of $3.4 trillion, AfCFTA is not just Africa's most significant step toward economic integration, but also a fundamental restructuring of its logistics and supply chain industries. For a continent historically fragmented by colonial borders, bureaucratic barriers, and infrastructural gaps, the impact has been profound and far-reaching.
A market in transformation
The AfCFTA's core promise, eliminating tariffs on 90% of goods traded between African countries, has already begun to reshape trade patterns across the continent. According to the African Union, the AfCFTA will be the largest free trade area since the formation of the World Trade Organisation (WTO), considering Africa's current population of 1.2 billion, which is projected to reach 2.5 billion by 2050. The World Bank estimates that the AfCFTA could boost Africa’s income by $450 billion by 2035, potentially lifting 30 million people out of extreme poverty.
Data published in Brookings highlights the effectiveness of the AfCFTA through strong trade performance. According to Afreximbank’s Africa Trade Report 2024, intra-African trade increased to $192.2 billion in 2023, marking a 3.2% rise from the previous year. This growth boosted the share of formal intra-African trade from 13.6% in 2022 to 14.9% in 2023, despite global economic challenges. Additionally, the United Nations Economic Commission for Africa projects a 35% increase in intra-African trade by 2045, following the full implementation of the AfCFTA.
Trade across Africa isn’t one-size-fits-all, and that’s where having deep local expertise makes a difference. We work closely with our teams on the ground and local authorities to stay up to date with changing regulations.”
Dirk Goedhart, Rhenus Logistics
“With AfCFTA encouraging more trade within the continent, we see strong potential in cross-border logistics, warehousing, and customs solutions. Businesses are looking for efficient ways to move goods between African markets, and we’re well-positioned to support that growth. E-commerce is also picking up speed, creating new demand for end-to-end logistics services. South Africa’s role as a key gateway for trade makes it a strategic hub for companies expanding their reach across the continent, and we’re ready to help them do that efficiently,” says Dirk Goedhart, MD of Rhenus Air & Ocean South Africa. Rhenus Logistics is a global logistics company with a significant presence in Africa.
“Kenya Association of Air Operators (KAAO) members are investing in improved logistics solutions, including enhanced cold chain facilities and cargo handling infrastructure,” says Liz Aluvanze, CEO, KAAO.
The KAAO is a registered national umbrella body tasked with promoting, supporting, enhancing, and protecting the interests of aviation industry stakeholders and allied businesses in Kenya, Africa.
AfCFTA: Confronting logistics challenges
The AfCFTA promises to revolutionise intra-African trade, but its success largely depends on addressing the continent's complex logistics landscape.
“The vision behind AfCFTA is exciting, but there are still hurdles to overcome. Different countries have varying customs, rules, and trade policies, which can slow things down. Infrastructure gaps in some regions also pose challenges for smooth logistics operations. Another big factor is digitalisation: many processes still rely on manual paperwork, and moving towards more automated customs procedures would make trade flow much faster. For AfCFTA to reach its full potential, consistency in implementation across all member states will be key,” says Goedhart of Rhenus Logistic.
Highlighting the challenges posed by the AfCFTA to KAAO members, Aluvanze of KAAO says, “AfCFTA holds significant promise for African aviation, but several structural barriers continue to hinder progress. One major challenge is the slow implementation of the Single African Air Transport Market (SAATM), which was introduced in 2018 to create a unified African air transport market. However, only 35 out of 54 countries have signed up, and enforcement remains weak due to protectionist policies and national interests overriding regional cooperation. Without full SAATM implementation, KAAO members face restricted access to key African markets.
While there are clear signs of progress, the full potential of AfCFTA’s impact on cargo and route expansion remains partially unlocked due to operational and regulatory barriers.”
Liz Aluvanze, CEO, KAAO
Another barrier is the reliance on restrictive Bilateral Air Service Agreements (BASAs) that limit competition and route expansion. Some African countries impose high landing fees and complex permit requirements to discourage foreign carriers, further stifling market growth. For example, the Ghana Civil Aviation Authority's scheme of charges includes landing and overflight permit fees ranging from $5 to $25, depending on aircraft weight. High operational costs also pose a challenge, as African airports are among the most expensive in the world, with high fuel costs and ground handling fees eroding profit margins for African carriers.
Poor trade and transport infrastructure exacerbates the problem, as weak road, rail, and port networks increase reliance on air transport while raising costs and handling times. Inefficient logistics infrastructure further reduces the effectiveness of cargo operations. Lastly, limited intra-African trade remains a significant constraint, with intra-African trade accounting for only 17% of total African trade, far below Asia (59%) and Europe (68%). Low trade volumes limit demand for air cargo services and reduce profitability on intra-African routes.”
In addition to these challenges, security issues in the Sahel and parts of Central Africa continue to disrupt logistics networks, increasing transportation costs due to higher risk premiums. Additionally, political instability in several countries has at times resulted in border closures, undermining the agreement's goal of seamless trade.
Exploring logistics opportunities
Despite these constraints, innovative solutions are emerging. “We’ve been strengthening our presence in Africa by expanding our warehouse capacity, enhancing transport infrastructure, and investing in sustainable solutions and technology. Real-time tracking and digital supply chain tools help our customers stay on top of their shipments. We’re also growing our local teams to provide on-the-ground expertise and personalised support. These investments ensure we can keep up with the evolving needs of businesses taking advantage of the AfCFTA’s opportunities,” says Goedhart of Rhenus Logistic.
“KAAO, together with African Airlines Association (AFRAA) and the East African Community (EAC), is actively engaging with African governments to accelerate the full implementation of the SAATM. Progress has been made, with several East African countries, including Kenya, Tanzania, and Uganda, showing increased commitment to SAATM reforms.
KAAO is also advocating for open skies and fair competition by working with AFRAA and regional aviation authorities to dismantle protectionist Bilateral Air Service Agreements (BASAs) and promote open skies policies. This policy push aims to establish reciprocal rights for African carriers, enabling them to compete on equal terms with foreign airlines.
To reduce operational costs, KAAO is lobbying for lower landing, overflight, and handling fees, specifically for cargo operations, to enhance cost competitiveness. On the infrastructure front, KAAO members are investing in improved logistics solutions, including enhanced cold chain facilities and cargo handling infrastructure. Additionally, KAAO is strengthening trade and market access by collaborating with the EAC and the African Union to harmonise customs and trade regulations across African markets. This includes working towards the creation of a single customs clearance process for air cargo to reduce delays and simplify trade flows. Furthermore, new trade corridors under AfCFTA have enabled KAAO members to expand into previously underserved markets, increasing business opportunities and connectivity,” explains Aluvanze of KAAO.
Digital platforms are transforming cross-border trade efficiency, with the Pan-African Payment and Settlement System enabling instant payments in local currencies and potentially saving African businesses $5 billion annually in transaction costs.
For local logistics providers, the expanding intra-African trade environment offers unprecedented growth opportunities. Previously fragmented markets now present potential for consolidation and regional expansion. The path forward requires coordinated public-private partnerships to address financing gaps.
A World Bank study, cited by Brookings, projects that foreign direct investment into Africa could rise by 159% if countries align their policies on investment, competition, e-commerce, and intellectual property rights.
The path forward for AfCFTA
Beyond its economic impacts, the AfCFTA-driven transformation of logistics is reshaping development pathways across the continent. The sector has become a significant source of formal employment in many countries. Under the AfCFTA, manufacturing could be the biggest beneficiary, alone adding up to 16 million new jobs, according to Brookings.
For Africa's logistics sector, the AfCFTA represents both the most significant opportunity and the most profound challenge in generations. The agreement is forcing a comprehensive reimagining of how goods move across the continent, who moves them, and what infrastructure and systems support this movement. While full implementation will take decades, the transformation is already well underway.