Digital Transformation and AfCFTA: Unlocking Africa’s Trade Future

By Dr Joe Iorhii

The launch of the African Continental Free Trade Area (AfCFTA) in 2019 marked a historic milestone in the continent’s trade development. The AfCFTA aims to establish a single continental market for goods and services, enabling the free movement of businesses, people, and investments, while reducing tariffs and non-tariff barriers. This bold step towards market integration will help lift many out of poverty. Alongside this initiative, the digitalisation of trade is also advancing.

Digital technology plays a vital role in shaping contemporary global trade. It is fast becoming the engine behind modern economic integration. The continental market integration will redefine Africa’s global commerce significantly only when it joins forces with digital transformation. Digital transformation is not just an accessory to trade but a decisive driver of Africa’s trade future. Digitalisation is capable of transforming AfCFTA’s promise into tangible economic gains as it will bring about a reduction in costs, expansion of market access, and empowerment of small businesses through digital tools such as e-commerce platforms, customs digitisation, fintech, blockchain, and cross-border data flows, which are becoming indispensable enablers of trade.

This outlook reflects the view of international trade expert Nancy Nwanze, whose article “Reimagining Africa’s Role in Global Trade “(Business Day, 4 Sept 2025) frames Africa’s shift from a supply base to a strategic growth engine — a crucial intervention during this period of global tariff changes and supply chain realignment.

Digital transformation acts as a catalyst for trade opportunities in Africa. For example, fintech companies such as Flutterwave, Paystack, and Chipper Cash are making cross-border payments faster and easier, supporting regional trade and commerce. Jack and Suri demonstrate that fintech solutions like Kenya’s M-Pesa have revolutionised mobile payments, enabling SMEs to transact seamlessly across borders without relying on traditional banking. Nigerian fintech firm Flutterwave has become a pan-African payment gateway, allowing SMEs to accept payments online and across borders. By 2022, Flutterwave had processed over $16 billion in transactions across 34 African countries.

There are also e-commerce platforms like Takealot and Konga, which are helping consumers buy goods across borders. Jumia, the largest African e-commerce platform based in Nigeria, was listed on the New York Stock Exchange in 2019. It operates in 11 countries across Africa and provides digital marketplaces for goods, food delivery, and digital services.

Ports are going digital for maximum trade benefits and efficiency. In Morocco, Tanger Med has introduced digital tools such as the Port Community System for advanced import clearance and digital check-in systems for exports, improving process reliability and reducing delays. This evolution further supports the argument in Nwanze’s article that investments in global trade and supply chains in Africa must underpin digitisation to reduce costs and improve transparency across borders.

Digital trade presents significant opportunities for Africa. Social media tools, such as WhatsApp and Instagram, give even small, informal traders access to broader markets. Africa’s digital economy is also growing in services such as outsourcing, creative industries, and app development, helping countries progress faster without relying on the traditional route of industrial growth. For example, many Nigerian SMEs now use Instagram to sell products abroad, showing how digital tools can link Africa to global value chains. With more than 60 per cent of its people under 25, Africa has the young population needed to keep driving this growth.

While there are concerted efforts in several African countries to digitise trade, with initiatives that have even transcended borders, such as Jumia e-commerce and Flutterwave digital payment platforms, there is yet to be a single African digital market platform. As previously mentioned, AfCFTA is designed to eliminate trade tariffs across the African continent.

Recognising that trade today is more complex than just dismantling tariffs, the AfCFTA Protocol on Digital Trade was adopted in 2024 by members to encompass areas such as e-commerce, digital payments, data flows, and cybersecurity. If effectively implemented, the protocol could establish a single African digital market that attracts investors and enhances cross-border trade. This would be especially valuable for small and medium-sized businesses (SMEs), which are vital to Africa’s economy but often encounter challenges due to inconsistent regulations. This echoes the points raised in Nwanze’s publication, emphasising that the success of AfCFTA depends on harmonised standards, a robust compliance infrastructure, and certification capacity so African goods can compete globally.

The AfCFTA Secretariat has already launched programmes to support SMEs through digital platforms that facilitate access to market information and regional trade opportunities. One such programme, the African Trade Observatory, aims to provide businesses with accurate, up-to-date trade data to help them identify market opportunities, compare tariffs, analyse trade flows, access information on supply and demand for various goods and services, and make better decisions about cross-border trade across Africa. When combined with digital transformation, AfCFTA has the potential to turn Africa’s fragmented markets into a unified and vibrant trading bloc.

Despite the growing opportunities, Africa’s digital transformation faces significant challenges. The most urgent are infrastructure gaps: many regions still lack reliable broadband, stable electricity, and efficient logistics systems to support digital trade. Rural communities are particularly disadvantaged, as weak connectivity prevents them from participating in online markets.

Regulatory fragmentation, which involves different and conflicting rules, also hinders progress; inconsistent ICT policies, data protection laws, and taxation frameworks complicate matters and create uncertainty in cross-border digital trade, according to UNCTAD and other international trade experts. Nwanze’s publication also highlights skill gaps, among other issues.

A significant skills deficiency remains a major problem on the continent. Many SMEs lack the technical expertise to use e-commerce platforms effectively or to defend themselves against cyber risks. For instance, Nigeria’s e-commerce sector—despite being one of the fastest growing in Africa—continues to face logistics inefficiencies and consumer distrust caused by frequent cases of fraud. Unless these barriers are addressed systematically, digital transformation will not reach its full potential to foster inclusive trade across the continent.

For Africa to fully harness the benefits of digital transformation in trade, it is essential to develop deliberate strategies to address the challenges. Digital trade regulations under the AfCFTA framework need to be harmonised to reduce fragmentation and foster innovation, in accordance with the AfCFTA Digital Trade Protocol’s aim to create “predictable, transparent and harmonised rules as well as common principles and standards that enable and support digital trade.”

At the same time, large-scale investments in broadband networks, renewable energy, and logistics infrastructure are essential to close the continent’s infrastructure gap. According to the World Bank (2021), “nearly 300 million Africans live more than 50 kilometres from a fibre or cable broadband connection, hence the lack of widespread availability of high-speed internet remains a significant hurdle for Africa to harness the potential of digital transformation fully.” This statement highlights the importance of expanding connectivity.

It is encouraging to see that collaborations with global technology companies are already in progress. For instance, Google’s Equiano subsea cable is projected to increase internet speeds by up to five times in certain areas, while Microsoft is investing in African data centres to improve access to cloud services. Ultimately, inclusivity must remain a core principle: UNCTAD reminds policymakers that digitalisation without inclusion risks worsening existing inequalities rather than reducing them.

Digital transformation is poised to play a crucial role and bring about a historic shift in Africa’s trade landscape. Innovations such as fintech and digital customs systems are assisting in breaking down barriers that have long restricted the continent’s participation in global markets. When integrated with the AfCFTA framework, digitalisation can reduce costs, enhance competitiveness, and encourage more inclusive growth.

However, the challenges are formidable: without adequate investment in infrastructure, skills, and coordinated policies, the digital divide could widen inequalities and exclude many from the benefits. The next decade will be vital. Suppose Africa can successfully connect digital transformation with the goals of AfCFTA. In that case, it has the potential not only to boost intra-African trade but also to position itself as a strong competitor in the global economy. Africa must choose between slow, gradual change and bold transformation, with digital trade acting as the driver of that bold transformation.

Dr Joe Iorhii is a University lecturer

Reference: Nwanze, Nancy (2025). Reimagining Africa’s Role in Global Trade: Strategy, Resilience and Partnership. BusinessDay (4 Sept 2025). UNCTAD publication…..