A report released by the World Economic Forum in January 2023 highlights that Africa has entered a new era as a frontier for global business and investment.
According to the report, by 2050 the continent will be home to 2.5 billion people, with combined business and consumer spending projected to reach $16.12 trillion. This trajectory is further accelerated by the establishment of the African Continental Free Trade Area (AfCFTA)-signed in 2018, ratified in 2019, and officially launched in 2021-which paves the way for a single continental market. AfCFTA presents a transformative opportunity to unlock Africa’s vast business potential, benefiting both the continent and global partners alike.
The preferential trade agreement under the African Continental Free Trade Area (AfCFTA) is poised to significantly boost international exports and intra-African trade, unlocking vast opportunities for local and global businesses to access and expand into emerging markets across the continent. The AfCFTA has identified four key sectors with strong potential to meet local demand through local production: automotive, agriculture and agro-processing, pharmaceuticals, and transport and logistics.
Macro-level trends in these sectors-combined with Africa’s rapidly growing population, rising incomes, and expanding connectivity-highlight a fertile ground for business expansion. However, while AfCFTA will catalyse growth, it will also bring shifts in business models and production structures, particularly through the intensification of intra-African trade.
Africa will not navigate this transition alone. Companies can leverage the support and tools provided by the World Economic Forum and AfCFTA to manage and mitigate potential disruptions. The Forum’s initiatives aim to ease physical, financial, and digital flows through multi-stakeholder engagement, public-private collaboration, and robust knowledge sharing, drawing on its extensive network and global experience.
Moreover, AfCFTA offers practical tools to facilitate trade, including guidance on rules of origin and a simplified payment platform. Insights from companies already succeeding in African markets further underscore effective strategies: forming strong local partnerships, building trust within communities, leveraging AfCFTA-enabled infrastructure and financial systems, and aligning multiple projects for greater impact.
Together, these mechanisms and lessons will help guide new investors and businesses toward meaningful, sustainable participation in Africa’s rapidly evolving and opportunity-rich markets.
The benefits to African countries and to business success under the free trade area arise from the private sector understanding, recognizing and acting on the initiative’s value. Such approaches are important for global businesses that are serious about doing business in Africa because it lays out the value of the unique opportunities available and examines how to capitalize on them as economies evolve with and transition to a more integrated regional market.
At the World Economic Forum in January 2023, Africa-originated scholars Signe and Muniyati highlighted that Africa has historically lagged behind in foreign direct investment (FDI) and participation in regional and global value chains, largely due to trade and competitiveness barriers. The establishment of the AfCFTA aims to remove these obstacles and open the door for Africa’s deeper integration into global trade networks.
They emphasized that investment under the AfCFTA offers a clear path to sustainable, equitable, and inclusive prosperity. It presents a unique opportunity for businesses to contribute meaningfully to the development of a continent with the world’s youngest population. The anticipated increase in investment and stronger value chains–driven by AfCFTA’s promise of economic integration–will create jobs, raise incomes, and especially empower women.
As trade expands and industrialization accelerates, Africa is expected to enter a virtuous cycle: increased manufacturing will generate high-skilled jobs, foster better education and training, and help retain local talent. This, in turn, will nurture competitive local businesses capable of forming impactful partnerships with global firms–yielding mutual benefits for both Africa and international stakeholders.
To better identify investment opportunities, the AfCFTA selected four high-potential sectors in its Private Sector Engagement Strategy: automotive, agriculture and agro-processing, pharmaceuticals, and transport and logistics. These sectors are expected to experience significant growth in production and trade under the AfCFTA, contributing to job creation, inclusivity, GDP growth, and local value addition. Collectively, they represent a $130 billion import market in goods and services.
The automotive industry is projected to exceed $42 billion by 2027, driven by rising incomes, growing domestic demand, and expanded intra-African trade. Agriculture and agro processing offer substantial potential for economic growth, job creation, food security, and poverty reduction, with intra-African agricultural trade expected to grow by 574% by 2030 if tariffs are removed.
Pharmaceuticals were identified as a critical sector with high value-add potential, as only 3% of Africa’s pharmaceutical demand is currently met through intra-continental trade. Strengthening this sector under the AfCFTA would enhance the resilience of health supply chains. Transport and logistics are foundational enablers of trade, with intra-African trade set to rise by 28% by 2030–creating demand for nearly 2 million trucks, 100,000 rail wagons, 250 aircraft, and over 100 vessels.
The World Economic Forum is actively supporting the implementation of trade and investment tools aligned with AfCFTA negotiations. Through public-private collaboration, the Forum works to reduce investment barriers, streamline supply chains, improve cross-border payments and access to trade finance, reduce trade-related costs and delays, and support environmentally sustainable practices. A dedicated platform has been proposed to identify and dismantle deep-rooted barriers, helping international investors enter and expand across African markets more effectively.
The World Economic Forum is advancing inclusive and sustainable development in Africa by promoting the seamless movement of goods, capital, and digital services across five strategic pillars: facilitating trade in goods, enabling services and investment flows, advancing digital trade, promoting inclusive trade, and supporting environmentally sustainable trade
A key enabler of these goals is the Pan-African Payment and Settlement System (PAPSS)–a groundbreaking platform that allows near-instant cross-border payments in local currencies, eliminating the need for foreign exchange conversions or third-party intermediaries.
