5 Ways Tariffs Are Hurting Africa’s Promise of AfCFTA
The African Continental Free Trade Area (AfCFTA), launched in January 2021, is touted as a historic leap toward Africa’s economic self-determination, aiming to connect 1.3 billion people across 55 countries into the world’s largest free trade area.
Its core vision is the removal of intra-continental barriers, particularly tariffs, to boost trade, industrialization, and inclusive development. Yet, despite the fanfare, tariffs—both those that remain and how countries approach liberalization—are emerging as a major drag on AfCFTA’s transformative potential.
Although AfCFTA mandates the elimination of tariffs of traded goods, current implementation remains uneven across all states. Many regional blocs still maintain high common external tariffs (CETs) on goods entering from third countries.
Here are five critical ways tariffs are undermining Africa’s integration.
- Fragmented Tariff Reduction Slows Real Integration
Under AfCFTA, member states commit to reducing tariffs on 90% of goods over five to ten years. Least-developed countries (LDCs) have up to ten years, while non-LDCs have five. In principle, this gradual liberalization should yield a massive boost to intra-African trade, but the slow pace and fragmented commitments have hampered progress:
- Schedules Delayed: As of February 2023, which is the latest data, only 46 out of 54 signatory countries had submitted their lists of tariff concessions, each with unique timelines and exclusions, including the schedules from four Customs Unions, namely the Central African Economic and Monetary Community (CEMAC), the East African Community (EAC), the Economic Community of West African States (ECOWAS), and the Southern African Customs Union (SACU). As of November 2023, 54 countries had signed the AfCFTA agreement (except Eritrea) while 47 had ratified it.
- Sensitive and Excluded Goods: Up to 7% of goods may be categorized as “sensitive,” and a further 3% can be excluded entirely, allowing strategically protected sectors to escape liberalization for up to 13 years. For example, Kenya and Nigeria have both listed hundreds of tariff lines as sensitive, including major agricultural and industrial goods.
Case in Point: Malawi and Mauritius
Malawi has liberalized up to 93% of tariff lines to the East African Community and 70% to SADC, but neighbouring countries lag far behind, meaning businesses still face customs duties and inconsistent rules—and the full benefits of AfCFTA remain distant.
Data shows 94% of Mauritius’ MFN (Most Favoured Nation) applied tariffs are duty-free. Mauritius has tabled this list of 94% of tariff lines (which are already duty-free at MFN) as its tariff offer.
2. Tariff Revenue Dependence Hampers National Commitments
A study found that Kenya would face annual tariff revenue losses of $14.2 million, Uganda $13.5 million, Tanzania $5.3 million, and Rwanda nearly $3.9 million, if full AfCFTA commitments were implemented.
While the theory is that increased trade will eventually offset these losses, in the short term—with pressing fiscal needs and social infrastructure deficits—many governments see tariffs as a financial lifeline, not easily forgone.
3. Tariffs Reinforce Regional Trade Imbalances
Rather than fostering continent-wide trade flows, tariffs are often wielded to protect domestic industries, preserving or even aggravating regional imbalances:
- Non-Tariff Barriers Too: Many countries pair tariffs with licensing, quotas, and unique standards, compounding the hurdles.
- Rules of Origin Loopholes: Inconsistent application of “rules of origin” allows some countries to shield favored sectors, while others complain of unfair competition.
Case in Point: Nigeria vs ECOWAS
Within ECOWAS, Nigeria has kept hefty tariffs on textiles, rice, wheat and processed foods to shield local producers—even though these are major exports from Benin and Ghana. The resulting trade tensions led to border closures in 2019-2020, slashing Ghana-Benin trade by 65% and undercutting supposed AfCFTA gains.
Such actions undermine faith in the agreement and make it harder for businesses to plan investments in cross-border supply chains. This has also been hurting Nigeria, and in April 2025, the country waived taxes on 90% of goods traded in Africa.
4. Tariffs and Customs Complexity Raise the Cost of Doing Business
Despite AfCFTA’s design to create a “single market,” the reality is that every border crossing can still bring a new set of tariffs, paperwork, and administrative delays:
- Informal Fees and Bribery: According to the United Nations Economic Commission for Africa, informal payments at borders—often tariff-related—remain widespread, amounting to 17% of the cost structure for some manufacturing firms in Uganda.
- High Trade Costs: African shippers face higher intra-continental costs than trade with Europe or Asia, often because tariffs are compounded by inefficient customs processing.
Case in Point: Nigeria vs ECOWAS
Uganda’s manufacturing sector spends as much as 17.4% of total costs on transport and border fees, including hidden tariffs and surcharges linked to complex customs regimes. These costs deter small and medium-sized enterprises (SMEs) from exporting, undermining AfCFTA’s goal of inclusive entrepreneurship.
5. Tariff Barriers Undermine the Growth of Regional Value Chains
AfCFTA’s promise lies not just in moving finished goods, but in building robust, cross-border value chains, especially in key sectors like agriculture, manufacturing, and pharmaceuticals. Persistent tariffs, however, act as tripwires at every stage:
- Value Chain Interruptions: African manufacturers struggle to source components duty-free—even within AfCFTA, if products fall under “sensitive” categories or rules of origin disputes.
- Reduced Investment Incentives: Multinational and African investors remain cautious about locating factories or assembling supply chains that could face sudden tariff impositions.
Case in Point: Automotive Industry in Southern Africa
South Africa’s automotive industry, which depends on imported parts from neighboring countries, has found that inconsistent tariff reductions among the Southern African Development Community (SADC) states create supply uncertainty. This has contributed to a fragmented regional industry, stalling investment and innovation that could raise value addition and create jobs.
The Path Forward Needs Bolder Tariff Liberalization
The AfCFTA’s transformative vision cannot be realized as long as tariffs, whether strategic, protectionist, or administrative, remain entrenched. The slow, fragmented reduction of tariffs keeps Africa’s market fractured and discourages the private sector from investing with confidence.
To unlock the full benefits:
- Accelerate Harmonization: Countries should commit to faster, deeper tariff reductions and harmonized schedules.
- Expand Compensation Mechanisms: The AfCFTA Adjustment Facility, which supports vulnerable nations facing revenue shortfalls, must be scaled up and better targeted.
- Simplify Customs Procedures: Move toward digital documentation and trusted trader programs to reduce hidden tariff costs and transit time.
- Support SMEs and Value Chains: Special initiatives are needed to help small businesses and startups break into regional markets now—not decades from now.
The future of African prosperity hinges on the ability to move beyond the old “tariffs vs. protection” debate, and instead build a common market that is open, efficient, and designed for shared growth.
How AMENA AFRICA Will Help You Navigate Africa’s Complex Trade Barriers
AMENA AFRICA plays a critical role in helping businesses navigate the complex landscape of trade tariffs under AfCFTA, especially given the current challenges slowing Africa’s trade integration. With tariffs still unevenly implemented across countries, fragmented commitments, and frequent use of tariff protections on sensitive goods by key markets like Nigeria and Kenya, here’s how we support companies in this context:
- Strategic Tariff Risk Assessment and Mitigation: Our experts analyze the fragmented tariff schedules and sensitive/excluded goods lists for individual markets and regional blocs (like ECOWAS, EAC, SADC). This helps companies identify where tariffs still apply and plan supply chains or product portfolios accordingly to avoid costly duties or delays. They keep clients updated with the latest tariff concession submissions and policy changes to ensure proactive compliance.
- Navigating Complex Customs and Non-Tariff Barriers: Beyond tariffs, Amena Africa advises on dealing with customs complexities, administrative bottlenecks, and informal fees which significantly raise intra-African trade costs. We help companies streamline cross-border processes by leveraging digital trade facilitation tools, trusted trader programs, and compliance best practices, reducing hidden costs and transit delays.
- Maximizing Use of AfCFTA Provisions: We guide businesses on new trade rules, including the harmonized rules of origin and the correct application of tariff offers under AfCFTA, enabling companies to qualify for tariff exemptions where possible. This strategic advisory enhances competitiveness in regional value chains by ensuring products meet necessary requirements and avoid tariff traps.
- Supporting Market Entry and Cross-Border Expansion: By combining tariff intelligence with market entry advisory, we help companies identify viable African markets where tariff reduction progress is strongest and economic complementarities exist. This focused approach helps our clients avoid markets with restrictive tariff or non-tariff barriers and build efficient regional supply chains, vital in sectors like manufacturing and agriculture.
- Policy and Revenue Risk Advisory: Given many governments’ reliance on tariff revenues slowing tariff liberalization, we advise firms on the likelihood and timing of tariff changes, including potential revenue substitution policies. This insight equips businesses to adjust pricing, contracts, and investment plans in a fiscally dynamic environment.