February 2025 Trade Developments in Africa:Insights and Highlights

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February has been a pivotal month for Africa's trade landscape, marked by strategic partnerships, infrastructure advancements, and policy initiatives aimed at fostering economic growth. This edition provides an overview of the key developments that are shaping the continent's trade policy dynamics.

African Union 38th Ordinary Summit

Leadership Transition

The 38th Ordinary Session of the Assembly of Heads of State and Government of the African Union convened from February 15 to 16, 2025, in Addis Ababa, Ethiopia. A significant outcome of the summit was the election of Djibouti's Foreign Minister, Mahamoud Ali Youssouf, as the new Chairperson of the African Union Commission. Youssouf succeeds Moussa Faki of Chad and will serve a four-year term, bringing with him extensive diplomatic experience to address the continent's challenges.

Focus on Reparatory Justice

The summit also launched the African Union's theme for 2025: "Justice for Africans and People of African Descent Through Reparations." This initiative seeks to address historical injustices related to slavery and colonialism, aiming for financial compensation, formal acknowledgments, and policy reforms. The AU is collaborating with entities like the Caribbean Community (CARICOM) to advance this agenda.

AfCFTA Digital Trade Protocol Adoption

Annexes Approval

During the summit, the African Union adopted several annexes to the Protocol on Digital Trade under the African Continental Free Trade Area (AfCFTA). These annexes cover critical areas such as rules of origin, digital identities, cross-border data transfers, online safety and security, emerging technologies, and financial technology. This comprehensive legal framework positions Africa to benefit from the digital economy, fostering innovation and job creation.

Nigeria's Role as Digital Trade Champion

In recognition of its efforts to promote digital enterprise and innovation, Nigeria was endorsed by the African Union as the Digital Trade Champion for the continent. This endorsement acknowledges Nigeria's proactive role in advancing the implementation of the digital trade protocol, including hosting the Digital Economy Roundtable in January 2025. The protocol is expected to create a conducive environment for young innovators, particularly in fintech and mobile banking, to participate fully in Africa's digital economy.

Strategic Partnerships and Agreements

AfCFTA Implementation

This month, the African Continental Free Trade Area (AfCFTA) has taken significant strides. On February 17, 2025, the Economic Commission for Africa (ECA) and the AfCFTA Secretariat signed a Memorandum of Understanding to enhance cooperation in implementing the AfCFTA. This partnership focuses on areas such as market access, trade facilitation, industrialization, and capacity building, aiming to create a more integrated and robust economic landscape across the continent.ECA Executive Secretary Claver Gatete emphasized the importance of collaboration, stating:

"The implementation of AfCFTA is a transformative opportunity for Africa, but its success depends on strong institutional partnerships. This MoU solidifies our commitment to working with the AfCFTA Secretariat to drive trade integration, enhance market access, and support Africa’s economic development."

Egypt-EU Food Security Agreement

Egypt and the European Commission signed a €90 million agreement on March 3, 2025. Funded by the European Investment Bank, this initiative aims to enhance Egypt's grain storage and logistics infrastructure as part of the broader Food Resilience Project. The project also receives additional support from the European Union and the World Bank, bringing total grants and financing to €210 million. Minister of Planning, Economic Development & International Cooperation H.E. Dr. Rania A. Al-Mashat said:

Investing in food security is a cornerstone of our commitment to building resilience, making people the foundation of economic development and effective international cooperation. Through our strategic partnership with the EU and the EIB, this project aims to enhance and modernize Egypt's grain storage and logistics infrastructure. By increasing our strategic wheat reserves, we are safeguarding livelihoods and strengthening resilience against global market disruptions and climate challenges.

Infrastructure Developments

Trans-African Highway Network

There are several efforts which aim to improve Africa's infrastructure that are currently underway. Among these is the Lobito Corridor railway connecting Angola to the Democratic Republic of the Congo and Zambia and , the rehabilitation of the Tanzania-Zambia railway is set to enhance East Africa's rail-sea transport network, facilitating cargo movement from Zambia's mines to Tanzania's coast.

Port Upgrades

Ports across the continent have seen upgrades to accommodate increased trade volumes. In Nigeria, the Lagos Port Complex has undergone a major expansion, incorporating modern facilities and advanced logistics systems. Similarly, the Port of Mombasa in Kenya has introduced state-of-the-art technologies to streamline cargo handling and reduce bottlenecks.

Digital Trade Platforms

February 2025 witnessed the launch of several digital trade platforms aimed at simplifying and accelerating trade processes. The African Union, in collaboration with major tech firms, introduced a continent-wide e-commerce platform that enables businesses to connect with buyers and sellers effortlessly. This platform is expected to boost small and medium-sized enterprises (SMEs) by providing them with wider market access.

Blockchain technology has started to play a pivotal role in enhancing trade security and transparency. Countries like Ghana and Rwanda have begun implementing blockchain-based systems to track and verify the authenticity of goods, reducing the risk of fraud and ensuring compliance with international standards.

Sector-Specific Developments

Agricultural Trade

Agriculture continues to be a cornerstone of African economies. February 2025 saw new initiatives aimed at boosting agricultural productivity and trade. Ethiopia launched a program to modernize its coffee production, targeting higher yields and better quality. Similarly, Tanzania signed a deal with European partners to export organic produce, capitalizing on the growing demand for sustainable food products.

Manufacturing and Industrial Growth

The manufacturing sector in Africa has gained momentum with investments in new factories and industrial parks. Morocco announced the opening of a new automotive manufacturing plant, expected to create thousands of jobs, and enhance the country's export capabilities. In addition, competitiveness. The government has embarked on an ambitious project with a total investment exceeding EGP 56 billion (approximately €1.1 billion). This initiative focuses on revitalizing the sector by upgrading infrastructure and equipping factories with state-of-the-art machinery.

Challenges and Opportunities

Economic Sentiment in South Africa

South Africa's manufacturing sector faced challenges in February, with the Absa Purchasing Managers' Index (PMI) dropping to 44.7 from January's 45.3, marking the fourth consecutive month of contraction. This decline is attributed to reduced demand, input supply issues, and dwindling export sales due to lower-than-expected demand, international trade disputes, and logistics problems. Additionally, increased tensions in South Africa–U.S. relations, following President Trump's executive order cutting U.S. financial assistance over disagreements on land reform and a genocide case involving Israel, have exacerbated trade uncertainties.