The ambition of the African Continental Free Trade Area (AfCFTA) extends far beyond tariff reduction. At its core, the agreement represents an effort to reshape Africa’s industrial landscape by creating integrated regional production systems capable of supporting long-term manufacturing growth. The ODI report ‘AfCFTA Implementation Challenges: Towards an African Continental Textiles and Apparel Value Chain’ argues that the future competitiveness of Africa’s cotton, textile, and apparel (CTA) sector will depend not only on scaling trade between countries, but also on building regional value chains that connect production, investment, technology, and markets across the continent.

The report begins by highlighting a fundamental contradiction within Africa’s CTA sector. While the continent possesses many of the ingredients required for industrial success, including cotton production, growing consumer markets, preferential trade agreements, and a large labour force, these assets remain weakly connected. Production is fragmented across multiple countries and concentrated at different stages of the value chain. Cotton-producing economies often remain disconnected from textile manufacturing, while apparel producers frequently depend on imported yarns and fabrics sourced from outside Africa. As a result, much of the value generated within global CTA supply chains continues to be captured elsewhere.

A key message emerging from the report is that regional integration should be viewed as an industrialization strategy rather than just a trade policy initiative. Historically, many African countries have attempted to develop textile and apparel industries within relatively small domestic markets. However, textile manufacturing is highly sensitive to scale. Spinning mills, weaving facilities, dyeing operations, and fabric production plants generally require large and predictable demand to remain competitive. Few African economies can independently generate sufficient demand to support fully integrated CTA ecosystems. Regional integration therefore becomes essential for creating markets large enough to attract investment and sustain industrial upgrading

The report also explores the relationship between regional value chains and rules of origin. Ongoing negotiations around AfCFTA rules of origin have become one of the most significant issues affecting the future development of the CTA sector. The authors argue that origin rules should be designed to support what they describe as a “Made in Africa” approach, encouraging regional sourcing and facilitating the emergence of continental production networks. Flexible and development-oriented rules can stimulate intra-African trade, support industrial diversification, and encourage firms to source inputs from within the continent rather than relying exclusively on imports from outside Africa.

The analysis further highlights the importance of technology and knowledge transfer. Developing competitive textile and apparel industries requires more than physical investment alone. Access to technology, design capabilities, production expertise, and managerial know-how remains essential. The report suggests that partnerships with foreign firms can play an important role in accelerating capability development, provided such relationships contribute to long-term learning and upgrading within African industries. Export-oriented production can also support competitiveness by exposing firms to international standards and buyer requirements while creating opportunities to participate in both regional and global value chains.

Importantly, the report challenges the notion that Africa should pursue a single, uniform continental value chain. Instead, it recognizes the diversity of industrial capabilities across different regions. North Africa possesses relatively advanced textile production systems, East Africa has developed growing apparel export industries, Southern Africa maintains stronger retail and home textile segments, and West Africa remains a significant cotton producer. The authors suggest that multiple regional value chains may emerge and gradually connect through broader continental frameworks. Such an approach may prove more practical than attempting to create a fully integrated continental production system from the outset.

The future of Africa’s CTA sector may therefore depend less on how much individual countries can produce independently and more on how effectively they can collaborate to build integrated manufacturing ecosystems that retain value, attract investment, and compete within an increasingly regionalized global economy.

Source…………