With the current volatility in global trade policy, local businesses that rely on a single market should be actively preparing to diversify their trade routes. One promising avenue is the African Continental Free Trade Area (AfCFTA), which provides a framework for boosting intra-African trade, helping to insulate the region from rising global protectionism.
This is according to Gregory Saffy, Managing Director for Sub-Saharan African Operations at FedEx, who describes AfCFTA as a bold and ambitious platform for African economic transformation. “The agreement represents one of the most important levers for driving inclusive growth and unlocking the continent’s full trade potential,” he says. “Of course, this won’t happen overnight, but we’re optimistic given the early progress being reported.”
Since the start of preferential trading under AfCFTA in January 2024, South Africa’s exports under the agreement have steadily increased, reaching approximately R820-million by March 2025. Goods exported include mining equipment, household appliances, plastics, apparel, food items and electrical machinery.
For South African small and medium enterprises (SMEs), however, the on-the-ground reality can be more complex to manage. Saffy explains that this is largely due to economic concerns. “For many governments, import duties and VAT are a significant source of revenue. Removing these taxes without a viable alternative puts pressure on national budgets. There’s also concern about unfair competition: if one country produces goods more cheaply than another, free movement could unbalance local markets and threaten domestic industry.”
Should AfCFTA be fully enforced, Saffy notes that local SMEs still need to be export-ready. “A free trade agreement doesn’t create demand for a business’s products. For SMEs to benefit, they need to market and sell their products into other African countries, secure payment and then fulfil the order.
Smaller players without dedicated export teams or regional networks may benefit to collaborate with a partner who is able to provide advice and support in this regard.” He adds that e-commerce businesses are best positioned to benefit from AfCFTA, given their digital reach, “but that reach has to be supported by brand awareness and marketing capacity”.
Another aspect for local SMEs to consider when trading in Africa is fraud and payment security. “A seller might ship a product after receiving what looks like payment, only to discover that the transaction was reversed once the goods are en route. For many SMEs, a single failed order can cause significant financial damage, and so cybersecurity is paramount.”
Saffy believes that the following targeted, practical actions by governments and policymakers are key to enabling smooth implementation:
- Accelerate the digitisation of customs systems: Paper-based processes remain a major source of delays and inefficiencies. Governments should prioritise rolling out electronic customs systems that integrate with the AfCFTA digital platform, AfCFTA Hub.
- Develop clear tariff reduction schedules: Transparency around which goods qualify for duty-free status, and under what timelines, will help businesses plan more effectively.
- Train customs officials on AfCFTA protocols: Border agents need consistent, up-to-date knowledge of the agreement’s rules to apply them fairly and uniformly.
- Support SME export-readiness: Governments can provide tools, training and funding to help small businesses become AfCFTA-compliant and export-ready.
For SMEs, partnering with a logistics provider that understands regional rules and requirements can make all the difference. FedEx has customs and clearance experts across Africa who help businesses navigate the regulatory landscape, avoid penalties and ensure shipments are compliant. The better prepared our clients are, the smoother the delivery process. Our goal is to help them avoid delays and deliver reliably.
While Saffy is realistic about the current challenges, he maintains that the long-term vision of AfCFTA is compelling. “SMEs must continue exploring African markets, even if the path may be more challenging than expected. The demand is there and over time, trade integration will improve. For now, businesses need to do their homework – with the right preparation and support, regional expansion remains a compelling opportunity.”
