What interviews with investors, executives, and policymakers revealed about the gap between continental ambition and operational reality.
Last year, I submitted my dissertation for the Executive Global Masters in Management at the London School of Economics. The research question I chose was not an abstract one: I wanted to understand how the African Continental Free Trade Area is actually influencing foreign direct investment into South Africa’s industrial sectors — not in theory, but in practice, as perceived by the people making real investment decisions.
What I found was more instructive than I expected. Not because the picture was bleak — it wasn’t entirely — but because the gap between what the AfCFTA promises and what investors are actually experiencing is wider, and more structurally rooted, than the official narrative tends to acknowledge.
This essay draws on those findings.
The promise is real. The implementation gap is too.
The AfCFTA is not hype. Creating a single market of more than 1.3 billion people, with a combined GDP approaching $3.4 trillion, represents a genuine structural shift in the architecture of African trade. Intra-African trade has historically accounted for a fraction of total trade volumes — a structural anomaly that reflects not just tariff barriers, but deeper constraints in infrastructure, regulatory harmonisation, and institutional capacity.
The agreement seeks to address all of this. And across the nine interviews I conducted with multinational executives, government officials, industry association leaders, and trade policy experts, there was broad recognition that AfCFTA represents something real.
But there was an equally consistent qualification: recognition is not the same as confidence.
As one senior South African government official put it plainly: “The opportunity is real, but delivery is where we often fall short.”
Three things investors are actually worried about
My research identified three themes that consistently shaped how investors and executives were thinking about AfCFTA. None of them are primarily about tariffs.
First: governance fragmentation. The most frequently cited concern was not the agreement itself, but the institutional architecture around it. Interviewees described uncertainty about the relationship between the AfCFTA Secretariat and existing Regional Economic Communities — overlapping mandates, unclear dispute resolution, and what one intergovernmental stakeholder described as jurisdictional ambiguity where “the roles are ambiguous… one cannot be said to be higher than the other.”
For investors trying to build cross-border strategies, this is not an abstract concern. It translates directly into regulatory opacity and heightened institutional risk.
Second: perception risk. Several respondents described what one executive called a “structural tax” on African investments — the premium imposed by global credit rating agencies and financial institutions that often overstates real risk, creating a chilling effect on capital allocation that is disproportionate to actual conditions on the ground. One intergovernmental representative argued bluntly for an African credit rating agency: “The global ones penalise us unfairly.”
This is a systemic issue. And it will not be resolved by the AfCFTA alone.
Third: infrastructure as the binding constraint. Across sectors, the message was consistent. As one consumer goods executive put it: “You can reduce tariffs to zero, but if the truck can’t get to the other side of the border, you’re stuck. That’s the reality we face.”
A food and beverage executive was equally direct: “We’re optimistic about what the AfCFTA can offer in theory, but from an operational standpoint, we’re still dealing with poor roads, inconsistent power, and backlogged ports.”
Infrastructure is not simply an enabler of AfCFTA. It is a precondition for it.
The geography of who benefits
One of the more important findings from my research was that AfCFTA does not function as a universal strategic pivot. Its relevance is heavily sector-dependent.
In industries where goods are tradeable, regional demand is visible, and firms are already export-oriented — food and beverages, agro-processing, automotive assembly — AfCFTA is actively reshaping investment logic. Executives in these sectors are thinking about regional production hubs, consolidated supply chains, and rules of origin strategies. One multinational executive in the food and beverage sector described it directly: “We are looking at how to create regional hubs so that we can get scale… knowing that under the rules of origin, 100% of the product would be originating from the continent and would not attract tariffs.”
In capital-intensive, geographically fixed sectors — mining, energy infrastructure — AfCFTA barely registers. Investment decisions in these industries remain dominated by national regulatory frameworks, infrastructure reliability, and the immobility of core assets. The agreement is perceived as peripheral.
This creates an uneven geography of benefit that is rarely acknowledged in the headline coverage of AfCFTA. Integration does not lift all sectors equally. It amplifies existing advantages — and does relatively little for those without them.
What this means for South Africa specifically
South Africa occupies a complicated position in this landscape. It has the most developed industrial infrastructure on the continent, a sophisticated financial system, legal predictability, and genuine regional influence. Several interviewees still described it as a top-five global investment priority.
But that position is increasingly conditional. As one interviewee observed, South Africa’s location advantages — once taken as a given — are now viewed as contingent on structural reform. Deteriorating logistics, unreliable energy supply, and policy unpredictability are eroding the competitive premium that has historically made South Africa the natural anchor for continental capital flows.
The risk is not that South Africa loses its position overnight. It is that the country’s institutional inertia allows smaller, more agile competitors to close the gap. Rwanda was cited more than once as a country executing a deliberate strategy to position itself as Africa’s business hub. The contrast with South Africa’s reform pace was not lost on the people I interviewed.
The bottom line
AfCFTA is a genuine structural development. Dismissing it would be analytically incorrect. But treating it as self-executing would be equally mistaken.
What my research found is that the agreement’s impact on investment is contingent — shaped by the quality of national institutions, the reliability of physical infrastructure, the credibility of regulatory frameworks, and the strategic agency of firms navigating all of the above.
The countries and firms that will benefit most from AfCFTA are not those waiting for the agreement to deliver. They are the ones investing in the underlying conditions that make integration viable — and positioning themselves ahead of the moment when those conditions converge.
That moment is coming. Whether South Africa is ready for it is a different question entirely.