Africa: The Trade Pact That Could Stitch Africa's Textile Industry Together
[Bird Story Agency] The AfCFTA offers African cotton, textile and clothing businesses the opportunity to build cross-border production networks, attract investment and retain more value on the continent. And it can do so while providing the shared rules and larger market needed to strengthen factories and trade corridors.
The African Continental Free Trade Area (AfCFTA) presents an opportunity for African textile businesses to build cross-border production networks, attract investment, and retain more value on the continent. However, turning this promise into reality is proving challenging. Success hinges on whether African businesses can move inputs across borders and transform this potential into factories, investment, and jobs.
The AfCFTA aims to create a larger market and provide preferential trade, but its effectiveness will be judged by its ability to facilitate African-made inputs moving across borders and forming regional production networks. Cotton grown and ginned in Benin could be spun into yarn in Côte d'Ivoire, woven in Ghana, and made into garments for sale across West Africa.
Early signs suggest that Africa's cotton-to-textile value chain is shifting from a fragmented, export-oriented model towards greater regional processing. However, the transformation is still emerging. To succeed, the AfCFTA must enable specialisation, where countries focus on specific stages of production, such as cotton cultivation, spinning, weaving, and garment manufacturing.
A key challenge lies in the rules of origin, which determine the extent of production that must occur within participating African countries for products to receive preferential treatment. If the rules are too lenient, imported fabrics may undergo minimal processing in Africa and still benefit from trade preferences. Conversely, overly strict rules could hinder textile factories that rely on imported yarn or fabric.
While Afreximbank estimates that intra-African trade accounted for roughly 18% of the continent's total trade in 2025, manufacturing only represents 34% of African exports. This indicates that many economies remain dependent on exporting commodities whose prices they cannot control while importing manufactured goods at higher costs.
The World Bank projects that full AfCFTA implementation could raise Africa's real income by about 7%, or nearly US$450 billion, by 2035. Most of this benefit would come from reducing non-tariff barriers and improving trade facilitation rather than from tariff cuts alone.
However, textile businesses face significant obstacles beyond tariffs. Issues such as delays at borders, varying technical standards, unpredictable transport costs, and inadequate electricity supply and skilled labor can undermine the benefits of preferential trade. Addressing these challenges is crucial for the success of the AfCFTA in transforming Africa's textile industry.
Written by urgent.news from AllAfrica's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
