Somalia has completed the final legal step toward joining the African Continental Free Trade Area after President Hassan Sheikh Mohamud signed the agreement into law. The move opens the way for formal accession to the world’s largest free trade area by participating countries, but economists say the country’s biggest challenge remains expanding production and exports rather than gaining market access.
MOGADISHU, July 31 — Somalia has completed the final domestic legal step toward joining the African Continental Free Trade Area (AfCFTA), after President Hassan Sheikh Mohamud signed the agreement into law, paving the way for the country to formally deposit its instrument of ratification with the African Union.
The presidential assent follows approval by the Federal Parliament and marks the end of Somalia’s internal ratification process. Once the instrument is deposited with the African Union Commission in Addis Ababa, Somalia will become the 50th African country to complete ratification of the continent’s flagship free trade agreement.
The Ministry of Commerce and Industry described the move as a milestone in Somalia’s economic integration with Africa, saying it opens the door to a market of more than 1.4 billion consumers across the continent.
“This is not simply a trade agreement,” Commerce and Industry Minister Gamal M. Hassan said in a statement. “It is a platform for industrialization, value addition, investment and inclusive economic growth.”
The ministry said it would begin implementing the agreement by preparing tariff schedules, aligning trade regulations and working with exporters, cooperatives and small and medium-sized enterprises to help Somali businesses benefit from the new market opportunities.
Beyond market access
While the agreement offers tariff-free access to much of the African market, economists caution that Somalia’s biggest obstacle is not access to markets but its limited production capacity.
Somalia already belongs to the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA), yet its exports remain concentrated in a narrow range of largely unprocessed products, including livestock, bananas, fish and hides. Most exports continue to be shipped to Gulf countries rather than African markets.
According to international trade data, Somalia exported goods worth roughly $448 million in 2024 while importing about $3.1 billion, leaving the country with a trade deficit of approximately $2.65 billion.
Analysts say reducing that gap will require greater investment in manufacturing, agro-processing, cold storage, veterinary services, transport infrastructure and export certification systems rather than tariff reductions alone.
Implementation begins
The government must now complete several technical requirements before businesses can fully benefit from AfCFTA preferences.
These include submitting Somalia’s tariff liberalization schedules, establishing rules of origin to certify Somali products, and strengthening customs and regulatory institutions to meet continental trading standards.
The AfCFTA Secretariat has previously pledged technical assistance to support Somalia’s implementation process.
The agreement comes as Somalia seeks to diversify its economy following debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative and expand exports from its livestock, fisheries and blue economy sectors.
Whether AfCFTA transforms Somalia’s trade prospects will ultimately depend not only on joining the agreement but on the country’s ability to increase production, add value to its exports and compete in one of the world’s largest free trade areas.
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