Page 16 - LUA March-April 2025

FEATURE

AfCFTA

UNLOCKING TRADE POTENTIAL AND
RESHAPING LOGISTICS

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., reports Parijat Sourabh.

he African Continental Free Union, the AfCFTA will be the largest African trade by 2045, following the full
Trade Area (AfCFTA) represents free trade area since the formation of implementation of the AfCFTA.
the most ambitious economic the World Trade Organisation (WTO), “With AfCFTA encouraging more
Tintegration initiative in Africa's considering Africa's current population trade within the continent, we see strong
history. Since becoming operational in of 1.2 billion, which is projected to reach potential in cross-border logistics,
January 2021, this landmark agreement 2.5 billion by 2050. The World Bank warehousing, and customs solutions.
has been steadily transforming estimates that the AfCFTA could boost Businesses are looking for efficient ways
how goods move across Africa's 55 Africa’s income by $450 billion by 2035, to move goods between African markets,
participating countries. Creating a potentially lifting 30 million people out and we’re well-positioned to support that
market with a combined GDP of $3.4 of extreme poverty. growth. E-commerce is also picking up
trillion, AfCFTA is not just Africa's Data published in Brookings speed, creating new demand for end-
most significant step toward economic highlights the effectiveness of to-end logistics services. South Africa’s
integration, but also a fundamental the AfCFTA through strong role as a key gateway for trade makes it
restructuring of its logistics and supply trade performance. According to a strategic hub for companies expanding
chain industries. For a continent Afreximbank’s Africa Trade Report their reach across the continent, and we’re
historically fragmented by colonial 2024, intra-African trade increased to ready to help them do that efficiently,”
borders, bureaucratic barriers, and $192.2 billion in 2023, marking a 3.2% says Dirk Goedhart, MD of Rhenus Air
infrastructural gaps, the impact has been rise from the previous year. This growth & Ocean South Africa. Rhenus Logistics
profound and far-reaching. boosted the share of formal intra- is a global logistics company with a
African trade from 13.6% in 2022 to significant presence in Africa.
A MARKET IN 14.9% in 2023, despite global economic
TRANSFORMATION challenges. Additionally, the United
The AfCFTA's core promise, eliminating Nations Economic Commission for
tariffs on 90% of goods traded between Africa projects a 35% increase in intra-
African countries, has already begun
to reshape trade patterns across the
continent. According to the African

14 LUA MARCH - APRIL 2025