Africa’s trade ambitions face infrastructure and logistics hurdles

Despite being the world’s second-largest continent by both area and population, Africa accounts for just 4% of global trade and 10% of inter-continental trade, far behind regions like the EU and Asia, which together dominate around 60% of international trade, stated by a DP World whitepaper. But the question is, why?

Across Africa, agriculture and fast-moving consumer goods (FMCG) continue to be the largest contributors to intra-African logistics demand. Sectors such as healthcare, pharma, retail, e-commerce, and automotive are witnessing growth, however, structural and operational limitations remain the biggest trade barriers.

The road networks handle roughly 80% of freight and 90% of passenger movement, but the gaps and inadequate quality restrict their effectiveness. According to the DP World study, a major struggle across most African countries is underdeveloped road and rail connectivity, congested ports, and unreliable energy supply, which influence the cost and time required to move goods across the continent.

Patrick Callychurn, Regional Director Africa Development, Hellman commented, “The most significant challenges remain border inefficiencies, customs complexity, and uneven infrastructure quality across countries. Transit time variability and regulatory differences can still make cross-border trade costly and unpredictable. Additionally, the limited availability of standardised logistics capacity in certain markets can restrict scalability for growing businesses.”

Based on the African Development Bank estimation, Africa needs financial investment of $170 billion in the infrastructure industry annually, but currently is facing a downfall of as much as $108 billion, considering that road transport accounts for 29% of the costs of traded goods in Africa compared to just 7% in other regions.

East to Southern Africa corridors, West African regional trade lanes, and North East Africa are the corridors witnessing the strongest growth recently, where economic integration is advancing, as they are mainly driven by FMCG, healthcare products, and agricommodities.

A complex mix of regional and political trade frameworks is another constraint that is restricting Africa’s trade environment from expanding, according to a whitepaper study. Unlike Europe and Asia’s regulated trade frameworks, such as ASEAN, Africa’s trade environment is shaped by a mix of national systems and regional integration, for example, Regional Economic Communities (RECs) such as the Economic Community of West African States (ECOWAS), the Southern African Development Community (SADC), and the African Continental Free Trade Area (AfCFTA).

However, Hellman evaluates the situation otherwise. “While implementation and harmonisation are ongoing and vary by country, the agreement has created a stronger framework for dialogue, simplification and future growth. The most visible impact so far is strategic rather than statistical - companies are planning regionally rather than country by country”, commented Callychurn.

Trade in Africa is witnessing further hurdles due to high tariffs and non-tariff barriers. Customs and unmatched product standards hamper cross-border commerce, affecting small and medium-sized enterprises (SMEs), which are the backbone of many African economies.

Hellman noted SMEs venturing into cross-border trade for the first time are recording increasing demand for value-added services, including customs brokerage, bonded warehousing and supply chain visibility.

“The most significant challenges remain border inefficiencies, customs complexity, and uneven infrastructure quality across countries. Transit time variability and regulatory differences can still make cross-border trade costly and unpredictable.”

Patrick Callychurn, Hellmann Worldwide Logistics

While SMEs are one of the factors pushing intra-African trade, the trade industry is going through a limited level of industrialisation. As several economies rely heavily on exporting raw materials such as oil, minerals, and cocoa, while depending on imports for manufacturing goods, the vulnerability restricts opportunities and leaves the economy to accept fluctuations in global commodity prices.

AfCFTA, which unites 54 countries to create a single space for goods and services, aims to decrease trade barriers, push economic cooperation, and deepen regional integration. However, if the policies mentioned are implemented consistently, AfCFTA is capable of increasing intra-African trade by more than 52.3% by 2035, as per White Paper study.

The report titled ‘African Trade and Economic Outlook 2026’ described that Intra-African trade is expected to reach $230 billion by 2026. The report also mentioned that the continent's output expanded by 4.2% in 2025, which is higher by 3.4% recorded in 2024.

As intra-African logistics are thriving, fair access to an improved power network, and technology play a key role in transforming the trade landscape, features such as real-time cargo tracking and digital payment systems support businesses to reach new markets, improve efficiency, and reduce costs.

Meanwhile, Callychurn noted that ‘soft barriers’ are just as critical as physical infrastructure barriers. He said that beyond infrastructure, regulatory barriers, customs inefficiencies, limited digitalisation, and payment constraints continue to impact trade flows.

DP World is contributing to Africa’s trade infrastructure as it strategically invested more than $25 million to modernise the Port of Dar es Salaam and is developing the country’s first deepwater port at Banana, on the Atlantic coast. The port is being built in Kongo Central province, near the DRC’s only Atlantic outlet.

Another $1.2 billion deepwater port project in Ndayane is one of its largest investments in Africa. The logistics company also launched a $165 million expansion of its container terminal at the Port of Maputo.

Africa is on the brink of a trade-led transformation with higher capabilities to emerge as a key player in global commerce. To unlock this opportunity, Africa will require advanced infrastructure, upgraded digital systems, and larger investments into trade infrastructure.