This briefing paper explores how green trade, regional value chains (RVCs), and new partnerships can accelerate green industrialisation across the African continent. It notes that global value chains are currently being reconfigured away from economic efficiency towards resilience, now defined under a ‘security–sustainability nexus’. Despite Africa representing 18% of the world’s population, it accounts for only 2% of world trade in goods and 3% of services trade. Furthermore, the continent receives less than 2% of global energy transition investment, a disparity described as striking given its vast solar potential and critical mineral reserves.

Introduction: The geoeconomics driving green trade and regional value chain development

Regionalism is emerging as a primary vehicle for growth as multilateralism faces challenges, exemplified by the fragmented outcomes at the March 2026 World Trade Organization Ministerial Conference. There are shared goals between G7, G20, and African economies to enhance economic resilience, including reducing economic vulnerability and securing more resilient value chains. Africa’s strategic objectives focus on diversification, where RVCs offer a buffer against external shocks, and policy alignment through the African Green Industrialisation Initiative (AGII). This framework aims to move beyond simple extraction towards mineral beneficiation and local value addition. Partners also focus on greening value chains by promoting environmental goods and services and capturing value through regional clustering and inclusion.

The greening of intra-African trade

The African integration agenda recognises opportunities to deepen value chain participation between national markets. Implementation of the African Continental Free Trade Area (AfCFTA) is critical to this mission; estimates suggest intra-African trade grew by 12.4% in 2024. Priority sectors selected by the AfCFTA include agro-processing, pharmaceuticals, and automotives. The AGII seeks to transform the continent into a global green manufacturing hub, leveraging its 30% share of world critical mineral reserves. However, investor perceptions of risk continue to constrain capital flows. Addressing these perceptions and supporting projects as they move towards investment readiness are priorities for Aid for Trade (AfT) and concessional finance.

Energy serves as the foundational pillar for green industrialisation. Despite hosting 60% of the world’s best solar resources, Africa attracted less than $50 billion of the $2.3 trillion invested globally in energy transitions in 2025. Bridging this gap requires a shift to integrated regional clusters. The operationalisation of the AfCFTA Investment and Digital Trade Protocols in early 2026 marks a significant turning point. The Digital Trade Protocol annexes, adopted in February 2025, are expected to save the continent $5 billion annually in transaction costs through the Pan-African Payment and Settlement System.

From commitment to delivery: partnership frameworks for green trade and sustainable development in Africa

New trade-related climate measures must reinforce rather than undermine the AGII to avoid a ‘green squeeze’. Areas of mutual interest, such as green competitiveness, must be strengthened through interoperable systems. Currently, the continent relies on a network of economic partnership agreements and free trade agreements, with South Africa being the only AfCFTA member to secure a new Clean Trade and Investment Partnership with the EU. New, integrated approaches are required to avoid trade-offs between G7 economic security drives and African development objectives. For instance, carbon prices already accounted for must be deducted from carbon border adjustment mechanisms, and international carbon credits should be recognised to boost funding.

The roadmap to 2027 offers windows for intervention, including the UK G20 Presidency in 2027 and Ethiopia hosting COP32. These events can help align international capital with African industrial priorities, particularly regarding de-risking energy corridors and reducing the high cost of capital for renewables, which is often two to three times higher than for European counterparts.

Learning from trade and investment partnerships

Modern trade and investment partnerships offer lessons for African economies. These include models like the Agreement on Climate Change, Trade and Sustainability and the Singapore–Australia Green Economy Agreement. The UK’s Developing Countries Trading Scheme (DCTS) uses rules of origin to promote the use of competitive African inputs, such as Zambian copper in South African electric vehicle cables. New institutional support structures, like the WTO’s Enhanced Integrated Framework, have a mandate to secure investment and trade finance. Organisations such as TradeMark Africa and British International Investment (BII) are pivoting towards market-level interventions to overcome coordination challenges and stimulate private finance.

Conclusions and recommendations

The report recommends continued dialogue between African governments, G7, and G20 members to ensure economic security does not come at the cost of supply chain disruptions. Development and commercial opportunities should be aligned, prioritising sectors like energy that have both commercial viability and developmental impact. A formal tracking mechanism for AGII and AfCFTA implementation should be conducted in 2027 and presented at the G20 and COP32 to signal that African green clusters are ‘investment-ready’.

Furthermore, the report suggests strengthening investment through de-risking instruments, building institutional capacity via technical assistance to National AfCFTA Coordination Offices, and creating digital infrastructure for traceability. Partners like the UK should provide a ‘partnership package’ leveraging financial services and R&D capability. Finally, development finance should support multi-modal green corridors that integrate renewable energy grids with industrial special economic zones, aligning investment with demand and productive capacity.