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Africa’s trade goals are realised on local levels primarily with energy, transport projects


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Africa’s trade goals are realised on local levels primarily with energy, transport projects

In on Africa logo

1st April 2025

By: In On Africa IOA

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The goal of the African Continental Free Trade Area is to make Africa a single market with no trade restrictions between countries. The work to make that a reality is being carried out on local levels between countries.

The African Continental Free Trade Area (AfCFTA) is a structural blueprint awaiting construction. The treaty’s architects have finished their work. A majority of African nations required to put the plan into effect have signed on. What remains is for engineers to begin working in individual nations to enable legislation to support this initiative and for builders like financiers, contractors and operators to carry out actual projects. Essentially, the AfCFTA seeks to further open Africa to cross-border trade by dropping tariffs and other trade barriers, thereby facilitating easier trade among African countries.

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New markets will be established regionally, and to satisfy these markets, locally made products will replace pricy Asian and European imports. Employment is set to increase based on intra-Africa trade, strengthening economies, raising living standards, expanding public services with financing from new tax revenues and shrinking poverty. The UN Economic Commission on Africa has predicted that the AfCFTA will boost intra-Africa trade by up to 25% by 2040, earning up to US$70 billion in trade that would not exist otherwise.

It is noteworthy that governments are not businesses. When governments intrude into marketplaces, distorting supply and demand with edicts, the AfCFTA ideal is subverted. There is also no African Union guidance in the development of this agreement. Therefore, it is up to individual countries to seize trade opportunities by enabling them, influenced by what they are hearing from their local businesses. Therefore, it is up to the business community to undertake trade opportunities. With new markets opened, businesses must explore them and determine how to develop them. At this point, governments can be of service by meeting businesses’ trading needs by asking:

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  • Is a new road or railroad required to transport exports to destinations in other countries?
  • Does the electricity infrastructure need expansion to allow factories to advance and meet their trading opportunities?
  • Does a new regional airline require countries on its route to finally repeal their air space usage regulations, as specified by the treaty that created the AfCFTA?

These examples illustrate that governments can best do their duty to enable the AfCFTA through infrastructure projects. This is just what is happening throughout Africa.

Malawi and Mozambique see border post reform as key for great cross-border trade

In March 2025, Malawi and Mozambique agreed to establish one-stop border posts between the two countries. This collaboration will form a part of the Southern Africa Trade and Connectivity Project that is Southern Africa’s initiative to implement the AfCFTA in the region. This agreement will enable border posts to provide truck drivers with the necessary customs permits at the border itself instead of sending the drivers to the nation’s nearest customs office or obtaining the permits in advance through the mail. This generates enormous flexibility for land-based freight shipping.

In particular, Malawi’s Mangochi Province with Mozambique’s Niassa Province, both of which are underdeveloped will likely see a much-needed economic boost through cross-border trade. Malawi will also launch an airborne fleet of drones to additionally curtail smuggling. Cargo warehouses will be built on both sides of the border so that trucks may swiftly unload and so that customers may more centrally purchase these goods. The World Bank is financing two country’s road infrastructure improvements, sending US$150-million to Malawi and US$230-million to Mozambique, which will lower costs by developing efficient regional value chains, enhancing trade co-ordination overall.

Bilateral projects meet energy needs

As nations collaborate to address shared energy needs, AfCFTA-inspired initiatives have gained momentum in 2025. One of the most noteworthy partnerships is the South Sudan-Sudan energy pipeline, cementing good relations between the two countries. The pipeline will also bring economic stability to an unstable country. In January 2025, South Sudan’s Ministry of Petroleum announced the reopening of a major refinery that will produce 90 000 barrels of oil a day, which will be sent through the new pipeline to neighbouring Sudan for export from Port Sudan.

East Africa will also see two major energy projects meet the AfCFTA’s goals of regional trade. The Eastern Electricity Highway Project will transmit 200 MW of electricity produced by Ethiopia’s new hydroelectric dams to Kenya and, through a separate bilateral agreement, to Tanzania. The US$1.4-billion project will generate an initial US$200-million annually through power trade, increasing as Ethiopia’s expanding hydroelectric production goes online.

In 2025, the East Africa Power Pool, a regional power pool for its 13 member states, begins a new trading initiative that will expedite access to and facilitate the trade of electricity generated from renewable energy. The institution will continue to make it easier for countries to move away from fossil fuel power generation.

In West Africa, the African Atlantic Gas Pipeline will connect Morocco on the Mediterranean with Nigeria on the Atlantic. Burkina Faso, Mali, Mauritania, Niger and the other nations of the Economic Community of West African States will see the 5 669-km pipeline pass through their territories. The project aims to boost energy security, provide new jobs and distribute fuel to the millions of customers in all these countries, as envisioned by the AfCFTA architects.

Rail is an important transportation option under the AfCFTA

For economic and environmental reasons, the AfCFTA promoted the use of railway transportation over that of road transport. Rail is also more efficient at moving bulk cargo. Southern Africa’s Lobito Corridor Railway project is under construction to link Angola’s Port of Lobito on the Atlantic Ocean with the Democratic Republic of Congo (DRC) and Zambia. These two landlocked countries rely on road links to move cargo to ports in Namibia and South Africa. When completed, the 1,289-km railway will allow the DRC and Zambia to better export their valuable mineral deposits.

What is more, with US$786-million budgeted for the Lobito Corridor project, new thinking is encouraging local manufacturing of natural resources to turn those into value added products. Such development could also mean that the new rail lines could be used to import factory inputs that would enable the creation and expansion of local industrial sectors in the region. Additionally, this will increase job creation and intra-Africa trade by creating goods that can be sold to other African countries and be exported abroad. These projects illustrate how the AfCFTA is being realised through individual nations coming together to meet trade needs.

The critical points:

  • The AfCFTA has created the blueprint to facilitate cross-border trade, and individual countries are now executing the agreement through bilateral projects
  • Private businesses and industries are informing governments of their trade needs, which can then be met by large infrastructure projects
  • In 2025, energy and transportation infrastructure projects dominate initiatives that are meeting the AfCFTA goals

Written by In On Africa

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