Trade between Africa and Europe could rise to nearly US$1 trillion over the next decade if the two regions deepen industrial integration and build shared production chains in strategic sectors, according to a report by Boston Consulting Group.
The report, Strengthening the Africa-Europe Corridor: Strategic Imperative in a Multipolar World, said bilateral trade could almost double from US$545 billion in 2024 if both continents move beyond a traditional buyer-seller relationship and develop integrated value chains in industries such as agrifood, energy, manufacturing, minerals and digital services.
BCG said the shift comes at a time of growing geopolitical fragmentation, supply chain diversification and rising competition over industrial capabilities.
The European Union currently absorbs about one-third of African exports, valued at around US$215 billion in 2024, while Europe remains Africa’s largest foreign investor with about US$254 billion in foreign direct investment stock.
Europe also sends between US$20 billion and US$25 billion annually in migrant remittances to Africa and provides US$30 billion to US$35 billion in official development assistance each year, the report said.
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BCG argued that Africa and Europe possess complementary strengths that could support deeper economic integration.
Africa has a young and rapidly urbanising population, vast natural resources and a growing consumer market, but still faces infrastructure, financing and skills shortages that limit industrial development. Europe, meanwhile, offers industrial expertise, capital and advanced technologies but is grappling with aging populations and slower domestic market growth.
Despite longstanding ties, the report said economic integration between the two regions has lagged behind broader global trade expansion.
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Merchandise trade between Africa and Europe increased by around 60 percent between 2004 and 2014 and by a further 25 percent over the following decade. By comparison, global trade doubled during the first period and expanded by around 30% in the second.
European foreign direct investment stock in Africa rose by only about 30% over the past decade, significantly below the pace of global FDI growth, which nearly doubled over the same period.
The report warned that both Africa and Europe are becoming increasingly vulnerable within global value chains as manufacturing capacity and technological dominance become more concentrated elsewhere.
Africa and Europe both recorded large trade deficits in finished goods with China in 2024, estimated at US$64 billion and US$374 billion respectively. Both regions are also increasingly dependent on U.S. technology firms for digital services, contributing to widening external payment imbalances.
Against that backdrop, BCG described Africa and Europe as “natural allies” in an increasingly multipolar global economy.
The report said recent economic reforms in several African countries, combined with Europe’s push to diversify supply chains, have created more favourable conditions for deeper cooperation.
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Africa is projected to account for nearly 60% of the global workforce by 2050 and holds large reserves of critical minerals, significant arable land and substantial renewable energy potential.
Europe, meanwhile, provides access to a single market of more than 440 million consumers and over $9 trillion in outward foreign direct investment stock.
BCG estimated that stronger integration could increase bilateral trade by an additional $220 billion to US$280 billion beyond historical growth trends, compared with only US$145 billion to US$185 billion under current dynamics.
The consultancy said strengthening existing competitive industries alone could generate between US$55 billion and US$75 billion in additional trade.
A larger opportunity lies in enabling African countries to replace part of Europe’s imports in sectors where the continent has structural advantages, including agrifood, energy, metals and minerals, textiles, automotive manufacturing and selected services.
The report identified three broad areas for investment: resource-based industries, light manufacturing and export-oriented services.
Resource-based industries could include local processing of minerals and agricultural products, rather than exporting raw materials. Light manufacturing opportunities include textiles, automotive components and industrial products integrated into European supply chains. Services opportunities include digital services, tourism and creative industries.
BCG recommended building geographically connected industrial clusters with shared infrastructure, logistics systems, labour markets and investment networks to support deeper integration into regional and global value chains.
Among the proposed projects are green hydrogen and green fertiliser industries in Morocco, Tunisia and Egypt; green iron and alumina production in Guinea; and processed agrifood industries across Côte d’Ivoire, Ghana, Togo, Benin and Nigeria.
The report also highlighted strategic mineral value chains in the Democratic Republic of Congo, Zimbabwe, Zambia, South Africa, Gabon and Mozambique.
Other proposed industrial hubs include textile manufacturing in West and North Africa, automotive and electrical component production in North Africa and digital services centres across several African economies.
BCG said achieving the projected trade expansion would require coordinated investment in infrastructure, skills development and trade facilitation to better connect African production centres with European ma
