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High Domestic Costs, Not Tariffs, Limit Impact of Intra-African Trade: World Bank Report

The Reporter MagazinebyThe Reporter Magazine
August 31, 2026
High Domestic Costs, Not Tariffs, Limit Impact of Intra-African Trade: World Bank Report
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High domestic trade costs remain the primary obstacle to economic integration across Africa, according to a report published by the World Bank and the Agence française de développement (AFD).

The study notes that while Sub-Saharan Africa maintains a trade-to-GDP ratio between 55 percent and 60 percent—a level comparable to East Asia—this openness has not yielded corresponding income growth. Over half of the region’s global exports consist of unprocessed primary commodities.

In contrast, intra-African trade features greater diversification, with manufactured goods comprising more than 60 percent of regional commerce. However, high overall trade costs continue to isolate neighboring markets.

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According to the report, approximately 60% of these trade costs originate within national borders due to customs delays, inefficient domestic logistics, and fragmented regulatory frameworks.

To promote growth, the report recommends prioritizing deep trade agreements that establish enforceable rules for services, technical standards, and investment. The authors estimate that while shallow agreements increase exports by 16 percent, deep trade agreements can increase exports by up to 56 percent.

The study identifies the Common Market for Eastern and Southern Africa (COMESA) as the only regional trade agreement on the continent that currently meets its criteria for a “deep” agreement.

Additionally, the authors recommend using “coalitions of the willing” to bypass political delays. Under this framework, smaller groups of participating nations can pilot regional public goods—such as shared energy grids and digital payment platforms—before expanding them continent-wide.

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