AfCFTA: Infrastructure deficits, poor logistics bane of manufacturers — SURVEY

Stories by Yinka Kolawole

A recent survey carried out by the Pan-African Manufacturers Association (PAMA) has revealed that many manufacturers in the continent are not able to benefit fully from the African Continental Free Trade Area (AfCFTA) agreement due to infrastructure deficits and poor logistics.

The report titled, ‘African Continental Free Trade Area: Impact and Opportunities Assessment for Africa’s Small and Medium-scale Industries’, noted that 34 percent of Small and Medium-scale Industries (SMIs) surveyed across the continent identified inadequate infrastructure and weak logistics networks as the “most critical obstacles” affecting optimal intra-continental trade.

PAMA is a continental Business Membership Organisation (BMO) established in 2018 to promote Africa’s industrial transformation under the African Union’s Agenda 2063, and is recognized by the African Union Commission as the representative of manufacturers on the continent. 

According to the report, the survey covered 207 manufacturing firms across sectors such as food and beverages, textiles, plastics, and chemicals.

96 percent of the SMIs surveyed expressed willingness to engage in intra-African trade, but noted that several hurdles continue to undermine their participation, such as inadequate infrastructure, cumbersome customs procedures, financial constraints, product standardisation, low production volume, and limited awareness of AfCFTA’s provisions and protocols.

The report added that 22 percent of respondents cited financial difficulties such as foreign exchange (forex) instability and lack of access to export financing as major obstacles, while another 26 percent said they had “absolutely no familiarity” with the workings of AfCFTA.

Commenting on the report, Interim President of PAMA, Engr Mansur Ahmed, who is a former President of Manufacturers Association of Nigeria (MAN), appealed to governments across Africa to prioritise infrastructure development, reduce trade bottlenecks, and expand capacity-building programmes targeted at SMIs. He also called for strong regulatory frameworks to ensure a level playing field.

“The full realisation of AfCFTA’s potential largely depends on strategic interventions that support the growth and active participation of SMIs in the scheme.

There is a need to invest in infrastructure and logistics, simplifying customs and regulatory processes, providing financial support mechanisms, and adopting export clustering for SMIs with similar products. There is a need to mitigate the risks of unfair competition, particularly from larger firms or industries.

“Despite challenges, targeted interventions and collaborative efforts can help unlock the full benefits of a single market in Africa for the continent’s industrial transformation,” he stated.