The African Continental Free Trade Area (AfCFTA) is an ambitious trade pact that came into effect in January 2021. It aims to overcome the legacy of colonialism, which linked African exporters to markets overseas while isolating them from their neighbours. Officially, just 15% of Africa's trade is internal, but research by the Sahel and West Africa Club of the OECD suggests this vastly understates reality: some $10bn-worth of food is traded each year within west Africa alone, as much as six times higher than official tallies. Nearly 90% of unrecorded food trade consists of large-scale transactions involving heavy lorries, not petty cross-border commerce. When estimates of unrecorded flows are combined with official data, the intra-regional portion of west Africa's raw-food exports (excluding cashews and cocoa) jumps from one-third to three-fifths—comparable to that of the European Union.
The African Union wants food production to increase by half and intra-African trade in agricultural produce to triple in value within ten years. Despite these pledges, many governments are not rushing to implement the AfCFTA, and some are turning to protectionism in the name of "food sovereignty".
In 2024 Africa received a record $97bn in foreign direct investment, about a third more than its total inflow of aid—a milestone reflecting the continent's transition from aid recipient to investment destination. The IMF reckons that in 2026 economic growth will be higher in Africa than in Asia; of the 15 fastest-growing countries anywhere, 11 are expected to be on the continent. In 2024 the 500 largest African firms recorded their highest-ever revenues in dollar terms, and local investors accounted for 45% of venture-capital commitments in Africa, the highest-ever share. In the first two months of 2026 the value of bonds issued by African countries on capital markets was higher than during any equivalent period since 2013. African sovereign-bond ratings remain at a five-year high. More than twice as much rail may be laid in the next ten years as in the past decade. But 15m young people will soon be entering the labour market every year, most without hope of a formal job, and the share of children in primary school has stalled since 2010.
The AfCFTA was first announced in 2012. It would be the largest duty-free area in the world by number of inhabitants if fully implemented. Only recently have goods actually been traded through a pilot project called the Guided Trade Initiative. Separately, AfCFTA has streamlined rules around data and, via the Pan-African Payment and Settlement System, allowed many African firms using different currencies to trade without first having to exchange local currency into dollars. The World Bank estimates that full implementation could boost foreign direct investment by up to 120% and increase intra-African investment by 85%. Aliko Dangote, Africa's richest man, has cited the potential of the AfCFTA as one of the reasons for his recent investments.
I've finally learned what "upward compatible" means. It means we get to keep all our old mistakes.