When the African Continental Free Trade Area (AfCFTA) came into effect, it was hailed as a “game-changer” for African economies. Today, the numbers prove it’s more than just a slogan:
- The World Bank estimates AfCFTA could boost Africa’s income by $450 billion by 2035.
- Intra-African trade could rise by 52%, creating one of the largest free trade areas in the world.
- By 2035, it could lift 30 million people out of extreme poverty while connecting businesses and consumers across borders.
This isn’t just policy, it’s opportunity. But the big question remains: are African businesses ready to seize it?This isn’t just policy, it’s opportunity.
The Challenge Right Now
Despite the promise of AfCFTA, African businesses still face significant barriers:
- Currency mismatches: Most cross-border deals rely on USD or EUR, exposing businesses to FX volatility and transaction costs.
- Payment delays: Traditional cross-border transfers can take 3–7 business days, even between neighboring countries.
- Fragmented infrastructure: Customs processes, logistics, and compliance requirements vary widely across the continent.
The result? Many SMEs and even larger firms hesitate to scale across borders, despite reduced tariffs. AfCFTA can open doors, but unless payments and processes catch up, businesses may find those doors only half open.FTA’s tariff reductions.
The Path Forward: Trading Smarter, Not Just More
To unlock AfCFTA’s full potential, businesses must tackle these structural issues head-on. Here’s how:
- Local Currency Settlement: reduce FX exposure by enabling payments in African currencies. Platforms like the Pan-African Payment and Settlement System (PAPSS) are paving the way, but adoption remains slow.
- Faster Digital Payments: cross-border payments shouldn’t take days. Businesses need fintech solutions that move money across markets in hours, not weeks.
- Integrated Financial Operations: scaling across Africa requires syncing invoicing, receivables, tax compliance, and treasury management into one system.
- Cash Flow Visibility: Finance leaders must see liquidity in real-time across markets, not wait for reconciliations at month’s end.
This is how African businesses will not just trade more under AfCFTA but trade smarter.
Case in Point: Nigeria and Kenya
Trade between Nigeria and Kenya highlights both the potential and challenges of AfCFTA.
- Nigeria exports $500M+ annually to Kenya, primarily in crude and manufactured goods.
- Kenyan exporters in agriculture and technology are pushing into West Africa but face payment bottlenecks.
- Without real-time payments and multi-currency options, both sides lose margins to conversion costs and bank fees.
AfCFTA offers tariff reduction, but unless payments and settlement systems improve, SMEs in both countries will struggle to scale beyond pilot shipments.
Where Yala Fits In
At Yala, we help African businesses prepare for this new era by:
- Offering multi-currency wallets that support over 20 currencies.
- Automating accounts payable and receivable, cutting down on manual processes.
- Powering cross-border payouts that are faster, traceable, and more transparent.
Because AfCFTA isn’t just a continental agreement, it’s a call for African businesses to scale beyond borders.
Why It Matters for SMEs
Large corporations may have treasury teams to manage FX exposure and settlement delays but SMEs don’t. AfCFTA is their chance to reach new customers and suppliers across Africa, but only if payments, FX, and logistics are simplified.
SMEs represent 90% of Africa’s businesses and 80% of employment. Enabling them with digital tools for payments and financial automation will be the real catalyst for AfCFTA’s trillion-dollar potential.
What Policymakers Must Do
AfCFTA’s success isn’t just about private companies. Policymakers play a key role by:
- Supporting local currency trade initiatives like PAPSS.
- Investing in digital infrastructure that connects customs and compliance across borders.
- Encouraging fintech–bank collaboration to lower transaction costs.
Without these, tariff cuts alone won’t unlock Africa’s full potential.
The Bottom Line
The African Continental Free Trade Area is one of the boldest economic experiments of our time. It has the potential to reshape global trade, reduce poverty, and unlock prosperity on a scale never seen before in Africa.
But opportunity doesn’t equal readiness. Businesses that invest now in multi-currency solutions, payment automation, and real-time visibility will be best positioned to thrive.
The question is: Will your business be ready to seize its share of Africa’s $1 trillion trade opportunity?
Also Read our article on Managing Payments for Nigerian Businesses
