Last week’s article explored Africa’s potential in global supply chains, highlighting the opportunities created by shifting trade patterns. But before Africa can compete globally, it must first strengthen its regional supply chains. The African Continental Free Trade Area (AfCFTA) was meant to unlock intra-African trade, yet it remains below 20 per cent, far behind Asia (60 per cent) and Europe (70 per cent). Despite AfCFTA’s promise, Africa still lacks the infrastructure, policy coordination, and industrial specialisation needed to create efficient regional supply chains. Without these, African economies will continue relying on external markets for raw materials and industrial inputs rather than sourcing from within the continent. Unlike Southeast Asia or the EU, where countries specialise in different parts of value chains, African nations often operate in isolation, making cross-border trade expensive and inefficient. Even when African countries produce similar goods, they compete instead of collaborating, limiting economies of scale and keeping manufacturing costs high. A fully functional regional supply chain would mean that a car assembled in Nigeria could source steel from South Africa, batteries from the DRC, and textiles from Ethiopia. This is the kind of regional integration that has fueled economic growth in ASEAN and North America, yet Africa has struggled to develop a similar model. First, poor infrastructure is a major obstacle. Transport costs in Africa are among the highest in the world, making it more expensive to trade with neighbors than to import from Asia or Europe. Limited cross-border rail and road networks, inefficient ports, and high logistics costs prevent seamless trade. Second, protectionist policies persist despite AfCFTA. Many African governments prioritise short-term tariff revenues over cross-border trade facilitation. Non-tariff barriers such as border delays, complex customs procedures, and inconsistent regulations make intra-African trade slow and unpredictable. Third, Africa lacks regional industrial specialisation. Unlike Asia, where countries focus on specific segments of value chains, African nations try to build similar industries independently rather than coordinating efforts. This results in fragmentation and inefficiencies that make African industries uncompetitive. Fourth, access to finance limits supply chain investment. High borrowing costs, weak banking integration, and limited access to trade finance make it difficult for African businesses to scale across multiple countries. Southeast Asia’s ASEAN Economic Community (AEC) successfully developed regional supply chains in automotive, electronics, and agribusiness by promoting industrial specialisation. Thailand became a car assembly hub, Indonesia focused on engine production, and Vietnam specialised in electronics components. This approach made ASEAN a globally competitive manufacturing bloc. To achieve this, African governments must actively support private-sector-led supply chain integration and ensure that trade policies align with industrial growth strategies. First, massive investment in infrastructure is critical. Governments and development banks must fund cross-border transport networks, logistics hubs, and industrial zones to reduce costs and boost trade efficiency. Second, harmonising trade policies is essential. AfCFTA will only work if African nations reduce non-tariff barriers, simplify customs procedures, and align industrial policies. Third, regional financing mechanisms must be strengthened. Africa needs better trade finance, credit facilities, and investment frameworks to help businesses scale across multiple markets. Fourth, public-private partnerships must play a bigger role in identifying strategic industries, attracting investment, and building competitive regional clusters. Last week’s article emphasised Africa’s need to integrate into global supply chains, but before it can succeed globally, it must first develop strong regional trade networks. AfCFTA provides a foundation, but without infrastructure investment, policy alignment, and industrial coordination, Africa will remain a fragmented market. The world is restructuring its supply chains. Africa must decide whether it will build its own competitive networks or remain dependent on external markets. The time to act is now. The author is an economist.
