Make Africa’s digital trade corridor work
Africa has taken an important step towards making its ambition of increasing trade among its own countries a reality with the establishment of the AfCFTA Digital Trade Corridor (DTC).
The joint venture agreement between the African Continental Free Trade Area (AfCFTA) Secretariat and Quest Ghana is more than another agreement signed at a ceremony.
It provides an opportunity to address some of the longstanding barriers that have made trading across African borders difficult and costly.
The proposed corridor will provide digital infrastructure for cross-border trade, connect businesses and markets and expand opportunities for corporations, small and medium-sized enterprises (SMEs), informal traders and farmers.
That is precisely the direction in which Africa must move.
The AfCFTA was created to build a single continental market for goods and services.
However, a trade agreement alone cannot make that market work. Businesses must be able to find buyers, process transactions, make and receive payments and move goods across borders efficiently.
Digital technology can help address many of these challenges.
According to the AfCFTA Secretariat, Africa traded more than $220 billion in goods and services in 2024, while the continent’s digital economy is projected to reach $712 billion by 2035.
The opportunity is particularly significant for young people, entrepreneurs, farmers and small businesses seeking access to larger markets.
But the real test will be whether an ordinary Ghanaian trader, farmer or small business owner can use the system to sell goods to customers in another African country with less cost, paperwork and uncertainty.
The proposed digital African minerals and commodities exchange could also help address concerns about the pricing and trading of Africa’s natural resources.
If properly designed and governed, it could give African producers greater participation in determining the value of the resources they trade.
The planned borderless payment system is equally important. Difficulties with cross-border payments remain a major impediment to intra-African commerce.
A system that allows businesses to transact across borders while recipients receive funds in their respective local currencies could remove an important barrier.
The proposed continental digital marketplace, which is expected to give farmers, traders and small businesses access to a potential market of more than 1.4 billion people, could also significantly expand business opportunities.
However, technology alone will not solve Africa’s trade problems.
The digital trade ecosystem must be secure, transparent and trusted. Data protection, cybersecurity, consumer protection and clear regulatory standards must be central to the initiative.
Governments must also invest in reliable electricity, affordable internet connectivity and digital skills.
There is equally a need to ensure that SMEs and informal traders are not excluded because they lack the resources or skills to participate.
Ghana, as host of the AfCFTA Secretariat, has a special responsibility to ensure that Ghanaian businesses benefit from the initiative.
Particular attention should be paid to women-owned businesses, young entrepreneurs, farmers and SMEs.
The three-year pilot must also have clear and measurable targets. Transaction volumes, costs, participating businesses, payment times and new markets accessed should be monitored to determine whether the project is delivering tangible benefits.
The ambition to increase intra-African trade from about 16 per cent to 50 per cent and beyond is bold. It must, however, move beyond conference speeches and become measurable reality.
Africa has negotiated the agreement and established the institutions. The next challenge is implementation.
The AfCFTA Digital Trade Corridor provides an opportunity to make the single African market more than an aspiration.
Africa does not need another digital trade promise. It needs a digital trade system that works for the farmer, the trader, the entrepreneur and the consumer.
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