Africa's fashion e-commerce market is expanding at remarkable speed, fuelled by youthful consumers and growing demand for Made in Africa goods. Yet systemic failures in payments, logistics and data continue to trap small businesses in national silos. Fixing these frictions could transform fashion into one of the African Continental Free Trade Area's most powerful engines of intra-African trade.
Africa's e-commerce landscape is booming. The market is projected to reach $75bn a year by 2028, with more than half a billion consumers expected to be active on online platforms. In Nigeria alone, fashion already accounts for around 20% of all business-to-consumer e-commerce sales, driven by a strong preference for locally made products. With Africa's population on course to represent a quarter of the global total, the continent has a genuine opportunity not only to clothe itself, but to shape global fashion trends.
Yet this local momentum masks a deeper structural weakness. African trade remains stubbornly extroverted, with economic systems designed to export raw value to global markets such as China and the EU rather than circulate it within the continent. Intra-African trade accounts for just 16% of total African trade, far below the levels seen in Europe or Asia. In 2024, Africa's total merchandise trade reached $1.5tn, but only $220.3bn of that was conducted within the continent.
For fashion micro, small and medium-sized enterprises (MSMEs), this reality creates an artificially constrained "local market". Only 8% of Africa's textile and apparel imports are supplied by other African countries. As a result, it is often cheaper and easier for a designer in Nairobi to source fabric from China than from a neighbouring producer in Tanzania. While the African Continental Free Trade Area (AfCFTA) could increase intra-African trade by as much as 50% by 2040, its benefits remain largely theoretical for small creative businesses, blocked by payment friction, logistics bottlenecks and fragmented systems.
The most immediate barrier is payments. Africa's financial infrastructure has been built to serve large corporate flows, not the high-volume, low-value transactions typical of creative entrepreneurs. Sub-Saharan Africa is the most expensive region in the world for remittances, with digital payment fees averaging 8.37% and rising to as much as 30% on certain corridors, such as between Tanzania and Kenya. For fashion businesses operating on net margins of just 10-15%, these costs can wipe out profits entirely.
Scaling across borders only compounds the challenge. Entrepreneurs must navigate a labyrinth of more than 277 mobile money wallets and over 500 banks across 55 countries. The complexity breeds mistrust. According to Ananse Africa's 2023-24 survey of 7,000 creatives, nearly half of respondents cited fraud as a major deterrent to online trade. In the absence of trusted digital rails, sellers often insist on full prepayment, while buyers hesitate to commit funds upfront.
To avoid punitive fees, many MSMEs fall back on informal cash channels. While this keeps trade moving, it leaves no digital trail. Without transaction histories, these businesses remain invisible to formal lenders and effectively unbankable, perpetuating a cycle in which lack of finance constrains growth and cross-border ambition.
Pan-African initiatives such as the Pan-African Payment and Settlement System (PAPSS) offer a glimpse of what is possible by enabling instant, local-currency settlements. However, adoption remains limited. Speaking at a recent roundtable on building trust and infrastructure for MSME cross-border trade, Roberta Annan, founder of the African Fashion Foundation, noted that awareness among small businesses is still below 20%, while integration with mobile money platforms, where most of the unbanked operate, remains incomplete.
Even when payments succeed, moving goods across borders presents another formidable obstacle. High transport costs function as a de facto "logistics tax", rendering many African products uncompetitive. In landlocked countries, logistics can consume between 40% and 60% of a product's final value. In East Africa, transport costs average $1.80 per kilometre per container, almost double the global average. Unsurprisingly, 65% of MSMEs cite delivery costs as a primary reason for avoiding cross-border trade.
Delays at borders compound the problem. Customs clearance in sub-Saharan Africa averages more than 12 days, an eternity for the fast-moving, seasonal rhythms of the fashion industry. Paper-based documentation, inconsistent enforcement and uneven national implementation of AfCFTA provisions continue to undermine progress. Despite the agreement's ambition, 15 African countries still lack adequate frameworks for cross-border e-commerce, including national strategies and quality infrastructure, while political considerations frequently disrupt execution.
The constraint on intra-African fashion trade is not a lack of demand or creativity, but a failure of connection. What is missing is interoperability: systems that speak to one another and generate shared, trusted data. Banks currently reject close to 40% of MSME finance applications due to insufficient credit histories. At the same time, logistics firms hold years of granular data on these same merchants' shipping performance and reliability. Linking these datasets could transform risk assessment and unlock financing.
Platforms such as Ananse demonstrate how strategic partnerships can begin to bridge these gaps. By acting as middleware, Ananse aggregates fragmented systems rather than replacing them. Through its partnership with Ecobank, the platform offers a single settlement account that manages backend switching and currency conversion, allowing merchants to price in local currencies while buyers pay in theirs. This structure reduces friction and de-risks transactions for both sides.
Logistics partnerships are equally critical. By working with DHL, Ananse aggregates shipping volumes to negotiate bulk rates that would otherwise be inaccessible to small firms, effectively democratising premium logistics. Integrated digital tracking numbers serve as a proxy for trust, reassuring buyers that goods are en route and signalling to payment providers when funds can be safely released.
If Africa is to realise AfCFTA's promise, such models must move from isolated solutions to systemic practice. Governments need to harmonise digital trade policies, strengthen export literacy and prioritise implementation over declarations. The private sector must build interoperable rails that include mobile money, logistics and finance, creating a single source of truth that makes MSMEs visible, bankable and competitive.
Only by fixing these connective tissues can AfCFTA shift from blueprint to boom. If it does, Africa's fashion industry will not only thrive at home, but emerge as a global centre of style, innovation and commerce.