How the private sector drives value addition in Africa
The role of the AfCFTA Secretariat’s private sector engagement strategy to drive value addition and value chain integration
The African Continental Free Trade Area (AfCFTA) is a transformative initiative aimed at deepening economic integration, boosting industrialization, and expanding trade across the continent. At the heart of this agenda is the AfCFTA Private Sector Engagement Strategy, which seeks to drive value addition and regional value chain integration by empowering businesses, especially small and medium-sized enterprises (SMEs).
By fostering a business-friendly environment and leveraging private sector investments, the strategy aims to reduce Africa's reliance on raw material exports and promote local manufacturing and processing.
The AfCFTA Private Sector Engagement Strategy focuses on enhancing value addition and integrating regional value chains across priority sectors. It aims to mobilize private sector investment, promote industrialization, and develop policies that support local manufacturing and processing.
The strategy emphasizes reducing trade barriers and providing businesses with the information and resources needed to capitalize on the expanded market.
Key objectives include promoting industrialization in sectors like automotive, pharmaceuticals, and agro-processing, enhancing access to finance through partnerships with financial institutions, and supporting SMEs, women, and youth entrepreneurs through targeted programmes.
The strategy also focuses on advancing digital trade by promoting e-commerce and digital platforms, while fostering public-private dialogue to address trade policies and investment challenges. Overall, it seeks to unlock Africa’s economic potential by integrating businesses into a seamless continental market.
The strategy identifies priority sectors key to advancing value addition and value chain integration, including the automotive industry, where the focus is on boosting local assembly and component manufacturing to reduce reliance on imports.
In the pharmaceutical sector, the goal is to enhance local production of vaccines and diagnostics to strengthen healthcare resilience. The agro-processing sector aims to build competitive regional value chains to improve food security and support agribusiness SMEs.
The transport and logistics sector seeks to improve infrastructure and connectivity to facilitate cross-border trade. Future waves will address additional sectors, prioritizing those with high potential for local demand fulfillment, such as textiles, followed by sectors with significant intra-African trade and growth potential.
By advancing these sectors, the AfCFTA aims to accelerate industrialization, boost trade, and drive sustainable economic growth across Africa.
To operationalize the AfCFTA's private sector engagement strategy, the AfCFTA Secretariat has established a range of mechanisms and strategic interventions to foster collaboration between governments and businesses, address challenges, and ensure effective participation in the AfCFTA framework.
A key platform is the AfCFTA Business Forum (Biashara Afrika), which serves as an annual venue for dialogue between policymakers and business leaders. It has emerged as the premier forum for discussions on AfCFTA and intra-African trade, focusing on identifying investment opportunities and resolving challenges.
The AfCFTA Trade and Investment Facilitation Platform supports businesses by providing real-time trade intelligence, market access information, and regulatory guidance. This digital tool enables businesses to make informed decisions about market entry and expansion, ensuring a seamless trade experience under the AfCFTA framework.
In partnership with Afreximbank, the Secretariat has introduced the AfCFTA Adjustment Facility to help businesses adapt to trade liberalization. This financial mechanism offers targeted support to businesses navigating the transitions brought about by the AfCFTA. Additionally, a $1 billion facility from Afreximbank is dedicated to supporting local content production and trade in the automotive sector.
Efforts are also underway to develop an African Pooled Procurement Mechanism to boost local production of pharmaceuticals, vaccines, and diagnostic equipment. This initiative has attracted support from institutions like Afreximbank and the African Development Bank (AfDB).
To align trade policies with business needs, the Secretariat has established sector-specific Public-Private Working Groups. These groups serve as collaborative platforms for addressing sector-specific challenges and ensuring that the private sector’s perspectives are integrated into AfCFTA implementation.
Partnerships with Equity Group and United Bank for Africa focus on supporting SMEs in the agro-processing value chain, providing them with the necessary financial and market access resources.
The International Trade Centre (ITC) plays a vital role by mapping the African private sector, identifying trade challenges, and supporting the development of business ecosystems. Joint programmes with ITC focus on capacity building, skills development, and advocacy for SMEs. These mechanisms are designed to enhance private sector participation in regional value chains and drive sustainable economic growth across the continent.
Over the medium term, the AfCFTA aims to advance Africa’s economic integration and enhance its global competitiveness.
These include developing bespoke digital trade tools to strengthen the AfCFTA's contribution to global trade data and analytics and designing innovative financing approaches for disruptive value chains. Specific initiatives include launching automotive supplier upgrade programmes and investing in innovating original equipment manufacturers (OEM) to accelerate industrialization, as well as a pharmaceutical manufacturer upgrade programme to boost local production capabilities.
Additionally, the AfCFTA plans to create policy incentives to support financing for fleet operators and engage meat and fish producers on certification for pan-African standards. We also envision a cross-cutting “Buy Africa” campaign to promote locally made products and enhance intra-African trade.
The AfCFTA Private Sector Engagement Strategy serves as a transformative framework designed to unlock new trade opportunities, boost industrialization, and strengthen Africa’s integration into regional and global value chains. Its success depends on active participation from businesses, stronger collaboration between governments, private enterprises, and development partners, and sustained investments in infrastructure, skills, and innovation.
With a unified private sector, strategic investments, and coherent policies, the AfCFTA has the potential to deliver a prosperous, industrialized, and globally competitive Africa. Building on the progress made, the AfCFTA Secretariat will continue to deepen its engagement with the private sector to ensure their active participation in implementing the AfCFTA Agreement. We hope you will join us in our endeavor.