World Bank Says Africa’s Next Integration Gains Depend on Finance, Payments and Infrastructure

According to a new World Bank report, Africa’s future economic integration gains rely more on connecting financial systems, payments, infrastructure, services, and production networks than on further tariff cuts.

The report, Integrating Africa: From Threads to Hubs, notes that the AfCFTA will succeed only if governments build functional regional markets with predictable cross-border trading, sourcing, and financing rules.

Jointly launched in Addis Ababa by the World Bank Group, the African Union Commission, and UNECA, the study cites domestic barriers as a major obstacle to deeper integration.

Around 60 percent of Africa’s trade costs stem from “behind-the-border” issues—such as customs delays, poor logistics, transport limits, fragmented standards, weak infrastructure, and limited services—that individual governments can fix directly.

Tackling these unilateral barriers offers significant economic benefits without waiting for new continental trade deals.

Services and financial systems key to integration

The World Bank estimates liberalizing transport, telecommunications, financial, and professional services could boost intra-African services trade under the AfCFTA by 60–64% by 2035.

Regional integration requires cross-border interoperability in payments, financial services, data, and regulations. Operating regionally necessitates interconnected customs, efficient payment systems, compatible technical standards, and supportive cross-border financial services.

Key recommendations include electronic single-window customs systems, risk-based inspections, competitive freight markets, simplified rules of origin, and increased openness in key services sectors.

Regional markets could support industrialisation

Intra-African trade makes up about one-fifth of Sub-Saharan Africa’s exports. Unlike raw-commodity global exports, regional trade is more diversified and manufacturing-intensive, leading the World Bank to frame regional integration as key to Africa’s industrialisation.

Because individual markets lack scale for competitive manufacturing, regional integration offers larger consumer and supplier pools. The report recommends developing regional value chains across countries alongside regional public goods—such as transport, electricity, digital networks, and payment systems—to support them.

AfCFTA implementation becomes the focus

With the continental free-trade agreement active, the World Bank emphasizes shifting focus to implementation. Ndiamé Diop, World Bank Vice President for Eastern and Southern Africa, noted the goal is connecting Africa’s 54 economies into a single market of 1.5 billion people.

The report calls for enforcing AfCFTA commitments, such as stronger dispute resolution and deeper services and investment provisions, alongside flexible coalitions to accelerate regional integration. AUC Deputy Chairperson Selma Malika Haddadi emphasized that governments, regional blocs, institutions, and businesses must partner to turn these agreements into concrete reforms and investments.

Measuring integration beyond trade agreements

The World Bank emphasizes that African integration should be judged by practical outcomes for businesses and citizens rather than signed agreements.

Key metrics include faster border crossings, cheaper logistics, dependable infrastructure, recognized qualifications, eliminated non-tariff barriers, and higher private investment.

Amid global trade fragmentation and shifting supply chains, robust regional production networks can decrease reliance on commodity exports, boost resilience, and capture more value from manufacturing and services.

Consequently, Africa’s next integration phase focuses on harmonizing national systems rather than just lowering tariffs.

Source: Capital