African integration, development finance, unequal trade, economic efficiency, structural transformation

The African Continental Free Trade Area (AfCFTA) agreement seeks to integrate markets in Africa into one large market. With the growing concerns about continental integration, this study identifies prospects and challenges of achieving structural transformation in Africa through the AfCFTA. The study employs the Interactive Structural Modelling technique, which helps to develop a contextual relationship between the factors in terms of their driving power or dependence power. The results indicate that unequal trade and investment opportunities, poor infrastructure, poor access to development finance, and the degree of industrialisation have a high driving power, hence a greater potential to create a ripple effect on other factors associated with African integration. Based on the findings, this study recommends that a platform be created within the agreement where these challenges can be tackled. In this view, the establishment of various development finance institutions monitored and facilitated by the AfCFTA affiliates, could be explored.

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