Five years since the formation of the African Continental Free Trade Area (AfCFTA), Board Chair of TradeMark Africa and former Ethiopian Prime Minister Hailemariam Desalegn Boshe has called on the private sector to take a leading role in driving the success of the agreement.

Speaking at a high-level event on 'Advancing Ghana’s Trade Leadership: Private Sector Strategies within AfCFTA' in Accra on March 18, 2025, Boshe emphasised that while governments negotiate trade deals, businesses must translate policy into prosperity.

“With a market of 1.4 billion people and a combined GDP of $3.4 trillion, AfCFTA presents a historic opportunity for African businesses,” Boshe stated.

“However, intra-African trade remains stuck at just 15%, compared to 50% in Asia, due to structural barriers such as fragmented regulations, high logistics costs, and limited access to trade finance,” he added.

Boshe urged Ghanaian businesses to expand beyond national borders and integrate into regional supply chains, leveraging AfCFTA as a launchpad.

He highlighted Ghana’s growing diversification, citing nearly $4 billion in revenue from exports beyond gold and cocoa in 2023, an 11.4% increase over the previous year.

“We must shift from exporting raw materials to building intra-African value chains,” Boshe stressed, pointing to the recent partnership between the Ghana National Chamber of Commerce and the Kenya National Chamber of Commerce as a model for business-to-business collaborations that create new trade corridors.

At the heart of this transformation, Boshe argued, is the need for regulatory harmonization. African exporters currently face compliance costs of up to $6 billion annually due to varying product standards across countries.

“If regulations remain fragmented, trade will remain fragmented. The private sector must push for harmonized standards across economic blocs to create a more seamless trade environment,” he noted.

According to Boshe, logistics inefficiencies remain a major obstacle to intra-African trade.

"Shipping goods within Africa is often costlier than exporting to Europe, with transport expenses in sub-Saharan Africa ranging from six to eleven US cents per ton-kilometer, compared to the global average of two to five cents," he explained.

He underscored the importance of the AfCFTA Digital Trade Protocol, adopted in 2024, which aims to streamline cross-border transactions and eliminate inefficiencies. However, Boshe cautioned that success depends on business adoption.

“The private sector must co-invest in logistics solutions, including warehousing and customs digitization, through public-private partnerships,” he stated.

Drawing on lessons from East Africa, Boshe noted that electronic cargo tracking and digital customs systems have already improved trade efficiency.

:In Kenya’s Mombasa Port, interventions have reduced cargo clearance times from seven days in 2012 to just 3.5 days in 2022, significantly lowering costs and boosting competitiveness," he mentioned.

Boshe also highlighted Africa’s dependence on the U.S. dollar for cross-border transactions as a critical weakness, exposing businesses to currency volatility.

He pointed to the Pan-African Payment and Settlement System (PAPSS) as a key solution designed to simplify intra-African trade payments.

“We need African financial solutions—regional payment systems, trade finance tailored to SMEs, and investment in industrial hubs to stimulate local production,” Boshe urged, calling on businesses to engage with financial institutions to ensure these mechanisms meet their needs.

The TradeMark Africa Board Chair stated that the organisation is working closely with the private sector to reduce trade barriers, including through a formalized partnership with the Ghana National Chamber of Commerce and Industry, to help businesses navigate compliance and maximize AfCFTA benefits.

“Our experience in East Africa has shown that even small gains in efficiency translate into significant export growth. A mix of hard infrastructure investments and digital trade solutions will be the game-changer for Africa’s trade future,” he emphasised.

SP/MA

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