The Guided Trade Initiative (GTI) is the latest of a number of new developments designed to enhance trade in Africa’s continent-wide free trade zone. It was launched in October 2022 to test meaningful, continuous trade under AfCFTA and aid the development of regional value chains that allow for more sustainable, climate-friendly trade across the continent. Eight countries, including Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia, are participating in the GTI, allowing for reduced tariff treatment and increased opportunities for SMEs, women, and youth.
While the GTI has the noble aim of making trade and investment across Africa easier, Africa faces significant challenges in infrastructure and transport, which have hindered trade. To overcome these challenges, projects are underway to enhance continent-wide infrastructure, such as the Standard Gauge Railway Project in Tanzania and the Trans-Maghreb Highway in North Africa. Additionally, many African countries are improving their manufacturing capacity to reduce their reliance on foreign imports, which account for more than half of the total volume of imports in the continent.
In order to enable sustainable trade under the AfCFTA, Africa would need a substantial amount of climate financing for its continent-wide major investments in infrastructure, manufacturing capacity, clean energy, and climate change adaptation. In this regard, the African Development Bank estimates that around USD 1.6 trillion in financing is required by 2030 to allow Africa to adapt to and mitigate climate change risks.
If Africa’s gaps in infrastructure and manufacturing can be developed sustainably, the continent’s free trade successes the entire planet will likely benefit.