The African Continental Free Trade Area (AfCFTA) agreement, set to unlock a $3 trillion market, could dramatically transform intra-African trade.
However, according to Captain Sunday Umoren, Secretary General of the Abuja MoU, Africa faces a significant logistical challenge: it needs around 100 ships to fully capitalise on this economic opportunity.
During the Quarterly Paper Presentation organised by the Nigerian Association of Master Mariners (NAMM) over the weekend, Captain Umoren emphasised that once fully operational, the AfCFTA agreement could boost intra-African freight by 28% and increase demand for maritime transport by a staggering 62%.
“Shipping and maritime transport have always been at the heart of globalisation,” he noted. “There’s a consensus among scholars, business experts, and African ship owners that AfCFTA is a game-changer for the Blue Economy in Africa.”
Africa’s intra-continental trade currently lags far behind other regions, accounting for just 10% of its total trade volume. This is a stark contrast to Europe’s 60%, North America’s 40%, and ASEAN’s 30%. The African Union aims to double this figure to 20% by leveraging the AfCFTA, which is expected to double maritime freight from 58 million to 131.5 million tons, according to the United Nations Economic Commission for Africa.
But there’s a catch: the surge in trade volume will require substantial maritime infrastructure upgrades, including the addition of about 100 new ships.
“With current tonnage levels, this surge in demand will be impossible to meet without significant investment in shipping capacity,” Umoren warned.
The AfCFTA presents a golden opportunity not only to boost trade but also to grow Africa’s Blue Economy.
Captain Umoren highlighted three critical areas that need urgent investment: ship ownership, port infrastructure, and logistics services.
“To maximise AfCFTA’s benefits, African nations must prioritise investments in these areas,” he said, urging African countries to implement incentives that encourage intra-African trade.
He added that a significant focus should be on improving manufacturing capabilities and leveraging Regional Economic Communities (RECs) like ECOWAS to foster economic resilience.
“Addressing trade barriers and investing in infrastructure are crucial to unlocking AfCFTA’s full potential,” he emphasised.
Captain Tajudeen Alao, NAMM President, highlighted the challenges facing the shipping industry.
“We have the market, but the ships are not there,” he stated.
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