The global economic landscape presents both challenges and opportunities for Africa, influenced by geopolitical shifts, digital advancements, artificial intelligence (AI), climate resilience efforts, and a push towards economic self-reliance. Aligning these factors with the World Trade Organization (WTO) agenda positions Africa as a strategic player in global trade.
Africa stands at a transformative juncture, navigating global shocks while building trade resilience, with regional value chains providing a foundation for global value chains. The AfCFTA serves as a strategic platform to align Africa’s trade policies with global frameworks, particularly the WTO. Regional value chains offer Africa an opportunity to move beyond raw material exports by fostering value-added industries. For instance, cotton grown in Benin could be processed into yarn in Kenya, transformed into apparel in Ethiopia, and then exported globally.
This approach enhances local economies, generates jobs, and reduces Africa’s vulnerability to commodity price fluctuations. The AfCFTA-WTO synergy is crucial. WTO frameworks complement Africa’s regional integration efforts, particularly in trade facilitation and dispute resolution. The WTO Trade Facilitation Agreement streamlines customs procedures, ensuring landlocked countries like Uganda, Rwanda, Mali and Burkina Faso can efficiently access global markets through neighboring coastal nations.
Africa’s focus on green trade also aligns with global sustainability trends. By adopting eco-friendly production processes—such as solar-powered manufacturing or sustainable agriculture—African regional value chains can integrate seamlessly into environmentally conscious global value chains in Europe and North America. Further, Africa’s response to digital transformation and efforts to building sustainable public digital infrastructure, is another urgent requirement. E-commerce and mobile payment platforms like Jumia and Mpesa have revolutionized trade, enabling small businesses to access new markets. The AfCFTA’s Digital Trade Protocol aims to enhance cross-border e-commerce regulations, aligning Africa with the WTO’s digital trade agenda.
Historically, Africa has faced numerous global crises— most recently, from the 2008 financial downturn and the 2014 commodity price slump to the COVID-19 pandemic and climate-related disruptions. These events highlight the critical need for economic diversification, regional integration, and trade resilience.
Intra-African trade remains low, accounting for only 16% of total trade, while over 50% of the continent’s imports and exports are concentrated among five external economies: the European Union, China, India, the United States, and the United Arab Emirates. Additionally, merely 16 out of 54 African nations source more than 0.5% of their intermediate goods from within the region, missing significant opportunities for industrial growth and value-added trade.
A Guest Editorial