Realizing Africa’s digital trade potential under the AfCFTA

Introduction

Digital trade is rapidly becoming central to how African economies integrate, compete, and generate opportunity. Africa’s digital payment market, for example, already processes over $1.1 trillion in transactions annually through 1.1 billion mobile users, and a recent Genesis Analytics report commissioned by Mastercard projected that the digital payments economy could reach $1.5 trillion by 2030. In 2022, Africa was home to 450 digital financial service companies, but by 2024, this number jumped to over 1,000 as investors sought to capitalize on the incredible business opportunities. The size of Africa’s e-commerce market is projected to reach $113 billion by 2029 (adding $14.5 billion between 2025-2030). All these factors make it an opportune time for investors to back the infrastructure and platforms that will power cross-border digital commerce across the single largest unified market of 1.5 billion people.

Recognizing these transformations, in February 2025 the African Union adopted eight annexes to the AfCFTA Digital Trade Protocol which cover digital identifies, cross-border payments, data transfers, cybersecurity, emerging technologies, and more. With the adoption of the AfCFTA Digital Trade Protocol, Africa has begun to put in place the rules, institutions, and market infrastructure required to support cross-border digital commerce at scale. What matters now is how quickly and inclusively this framework is translated into investable platforms, functioning markets, and tangible gains for firms, workers, and consumers across the continent. This piece explores core investment opportunities, challenges, and strategic approaches needed to create value and ensure Africa’s digital trade transformation delivers broad-based economic impact.

3 core investment opportunities

The AfCFTA Digital Trade Protocol is creating the regulatory foundation for Africa’s $180 billion digital economy (in 2025). Strategic investors are benefitting from this, finding success particularly in payment systems, e-commerce marketplaces, and trade facilitation tools wherein the Protocol is addressing existing roadblocks.

Payment infrastructure: Cross-border payments through traditional channels can cost 7-20% of the transaction value and take 3-5 days to clear. This inefficiency is directly addressed by the Protocol by its mandating of provisions like mobile money interoperability, cross-border e-KYC authentication, and integration with platforms like the Pan-African Payment and Settlement System (PAPSS) and regional settlement systems. In response to these challenges and the Protocol, investors are helping to tackle this issue: The PAPSS is projected to save $5 billion annually in transaction costs by enabling local currency transactions, Flutterwave has achieved a $3 billion valuation by facilitating payments for global merchants and payment service providers, and M-PESA has more than 60 million monthly users that connect with 5 million businesses, 950,000 merchants, 60,000 developers, and 600,000 agents. The cross-border payment market is expected to triple by 2035, from $329 billion in 2025 to $1 trillion in 2035.

E-commerce and digital marketplaces: Africa’s e-commerce users are projected to reach 500 million in 2025, processing over $500 billion in transactions. The dominance of internet usage via mobile devices in Africa (13% above the global average) means mobile e-commerce dominates, with 75% of the continent’s e-commerce transactions happening on smartphones. Globally, business-to-business (B2B) commerce dominates over business-to-consumer (B2C) (five times the size). Many African companies are following this trend, finding that B2B is often less expensive and generates higher revenues. Matta, for example, is a Nigerian digital trade platform designed to connect African manufacturers to verified suppliers and manage all of the steps of trade (sourcing, supplying, logistics, and payments) on one platform. And significant untapped potential remains: ITC found that 94% of all online businesses in Africa were from 10 countries. Consumer platforms are also growing rapidly. Examples include Jumia, a pan-African e-commerce platform that operates a logistics network across nine countries and facilitated 22.3 million in orders in 2024, and Kilimall, an East African e-commerce leader that enables African exports to China. The Protocol mandates that governments recognize electronic trade administration documents as legally equivalent to paper versions and allow flexible electronic authentication methods, which creates significant demand for these digital solutions.

Inclusive access platforms: 95% of registered African businesses are MSMEs. While 80% have bank accounts, a CSIS study finds that the banking sector does not meet the needs of 40% of MSMEs. Digital banks and fintechs are tapping into this need, using advanced scoring algorithms and other AI-driven innovations to reach more MSMEs. TymeBank, a digital bank in South Africa (now part of a multi-country digital banking group, Tyme, headquartered in Singapore), is a digital bank that serves more than 10 million customers. It was the first digital bank to reach profitability on the continent, and is now worth $1.5 billion. The AfCFTA Protocol will help implement digital ID and payment standards which can help formalize market access to those that are underbanked and open new business opportunities leveraging these technologies. The Protocol also explicitly mandates digital inclusion, requiring governments to promote meaningful participation of MSMEs, women, youth, rural communities, and persons with disabilities in the digital economy. Platforms are already responding to this mandate, with platforms like SheTrades and Soko connecting African women entrepreneurs to global markets.

Key challenges

Infrastructure deficits still persist, which create key barriers for scaling. First, while many countries have achieved very high internet penetration rates, the continent’s 37% average is well below the global 67% average. Second, infrastructure deficits create barriers for logistics, including poor last-mile delivery infrastructure (a limiting factor for B2C companies) and fragmented customs procedures. Third, high global cybercrime rates, bolstered by a lack of uniform cybersecurity laws, create distrust. Only 15 countries have ratified the AU’s Convention on Cyber Security and Personal Data Protection, which is meant to harmonize data protection laws. Fourth, without the Protocol, companies must navigate 54 different regulatory environments. The full implementation of the AfCFTA Protocol, however, does address many of these challenges and offers a solution through its five-year transition period for countries to align their domestic regulations.

Strategic investment approach

The rapidly changing digital trade environment means investors will need to keep in mind a few key principles and inroads.

Invest in Protocol-mandated infrastructure: The Protocol creates demand for technologies that do not yet exist at scale in Africa, including things like interoperable payment gateways, digital identity systems, cybersecurity solutions, and others, meaning significant opportunity lies in partnering with governments and/or finding innovative solutions for how to implement these at scale. Digital solutions that can address multiple challenges like logistics, payment, coordination, etc. can be extremely effective.

Build inclusive, accessible solutions: To reach underrepresented communities, investors can seek out mobile-first, affordable e-commerce and payment solutions that serve MSMEs, especially women traders. Partnering with programs that provide digital literacy training could help communities understand what digital tools are available for them and connect them to the intra-African and global market.

Explore public-private partnerships for infrastructure scaling: The Protocol’s implementation requires massive investment in broadband expansion, regional data centers, affordable devices, and more. Investors can explore blended finance models that de-risk investments, making sure that public-private partnerships cover both the initial rollout and the ongoing maintenance and upgrades needed to reach rural entrepreneurs.

All in all, those who can help build out the digital trade services and financial services companies in Africa will be able to capture compounding value as Africa’s youngest, fastest-growing market fully integrates into the global digital economy.