Executive summary
1. Long-Standing Partners with Strong Economic and Cultural Ties
Europe and Africa are closely intertwined, both culturally and economically, driven in part by geographic proximity. The EU holds the largest share of foreign direct investment (FDI) stock in Africa and accounts for roughly one-third of the continent’s exports. Nearly nine million African migrants live in Europe, while almost 30% of foreign students in Europe are African.
Bilateral collaboration is underpinned by a high degree of complementarity in socio-economic dynamics. Africa combines a young, rapidly urbanizing workforce with abundant natural resources, but faces persistent gaps in skills, capital, and infrastructure that limit its ability to industrialize at scale and integrate regionally. Europe, by contrast, brings industrial capabilities, capital, and technological know-how, but faces pressures from an aging population and maturing markets.
Nevertheless, the growth of the Africa-EU economic collaboration has lagged global dynamics in the past two decades. Both bilateral trade in goods and European FDI stock in Africa have grown more slowly than global dynamics.
2. Opportunities for Deeper Collaboration in an Increasingly Multipolar World
Africa and Europe operate in an increasingly multipolar global economy. Evolving trade patterns, technological concentration, and shifting financial flows are reshaping their global positioning. In goods trade, both Africa and Europe are net importers of finished goods. For example, Africa’s trade balance with China recorded a deficit of $64 billion in 2024 (coverage ratio of 63%) while the EU’s deficit was $374 billion (coverage ratio of 39%). A similar dynamic is visible in services, particularly in digital services. For example, Africa’s coverage ratio for services trade with the US was 51% in 2024, compared to 71% for the EU. Moreover, Africa remains dependent on external financing while creating limited domestic value. Europe plays a global role as capital provider but captures limited value in global supply chains.
These patterns suggest that, beyond existing global trade relationships, there is significant white space for Africa and Europe to scale local production and deepen bilateral collaboration. While this potential has long existed, improving policy frameworks and the gradual strengthening of economic fundamentals in many African countries, alongside growing European demand for diversification, are creating a more favorable context for action. Moreover, global shocks in recent years have made these structural patterns more visible and consequential. Strengthening the Africa-Europe economic partnership is therefore not only an opportunity, but also a time-sensitive imperative. At the same time, the corridor has become increasingly contested. Other geopolitical actors are deploying more assertive strategies to secure influence, access and long-term positioning in Africa. This raises the bar for Europe to engage more strategically and consistently in the continent in addition to its rules-based approach.
3. A Joint Growth and Resilience Agenda Towards $1 Trillion Bilateral Trade
A joint growth and resilience acceleration agenda for Africa and Europe can be anchored by developing integrated value chains. Africa can leverage its demographic and natural resource advantages, and ongoing pan-African trade integration to accelerate industrialization and unlock sustainable growth. Europe, in turn, brings industrial and institutional capabilities, access to a single market of more than 440 million consumers, and deep pools of capital. Through deeper value chain integration, Europe could diversify its supply and growth markets, and reinforce its competitiveness and economic security.
The economic opportunity is substantial. Bilateral trade could nearly double from about $545 billion today to up to $1 trillion over the next decade. This compares with a forecast baseline growth of $145–185 billion (+2.2% annually). Additional growth can be unlocked by consolidating existing trade positions in contested sectors and by enabling Africa to substitute a share of Europe’s imports in sectors where it has structural strengths.
4. Selected Industrial Clusters as Anchor Points for Trade Corridors
Capturing this opportunity will require focusing on a select set of high-potential industrial clusters where Africa has clear structural strengths and Europe has strong strategic interests. Three high-potential archetypes emerge. First, resource-based value chains, where Africa can move from upstream extraction to midstream processing (for example, battery-grade materials, processed agricultural goods). Second, light manufacturing, including both finished goods and components integrated into European value chains (for example, textile and automotive sectors). Third, tradable services, including digital services, tourism, and cultural and creative industries.
Within these archetypes, the focus could be on clusters of adjacent sub-sectors that benefit from shared infrastructure, investment, and skills, situated in geographically-coherent areas (sub-national, national, or cross-border). A non-exhaustive set of 15 priority clusters is proposed as a starting point across the African continent.
5. Deliberate, Well-Orchestrated Interventions to Unlock Potential
In each of these clusters, success will ultimately depend on deliberate, well-orchestrated market interventions. Deeper value chain integration will be built on mutually-reinforcing, sequenced interventions in trade, investment, and skilling. Success will depend on addressing corridor-specific structural constraints, such as reliable power supply, efficient logistics and trade execution systems, access to finance and foreign exchange risk mitigation, and aligning with European standards and certification systems. It will be equally important to create a dedicated joint co-ordination mechanism for each corridor to ensure that the right actions are taken by the right stakeholders at the right time.
Case study: Morocco’s industrial transformation over the last two decades
Governments could provide strategic direction, finance public infrastructure, and deploy targeted market interventions. Public financial institutions and concessional capital providers could offer the appropriate instruments and vehicles to crowd in private capital and support trade and skilling initiatives. The private sector would play a critical role in scaling the corridors and bringing investment, technology, and operational capabilities, while anchoring demand and developing bankable projects.
6. Immediate Action Before the Window of Opportunity Closes
Strengthening the Africa-Europe corridor is a strategic imperative to achieve more sustainable growth and resilience for both continents in an increasingly multipolar world. Europe and Africa could seize the opportunity to create a genuine win-win outcome through joint value chain integration in selected sectors and geographies. It is important for governments and companies to act now, before the window of opportunity to strengthen this partnership closes.
Case study: The DRC-Zambia Copperbelt
Today’s activities in the Copperbelt remain largely upstream focused with limited processing capacity. Zambia refines less than 25% of its copper production, while the DRC accounts for less than 1% of global cobalt refining. Midstream and downstream activities are largely dominated by Chinese players, who are supported by strong upstream control. China currently accounts for around 40% of global copper and 65% of cobalt midstream processing. Downstream, its position is even stronger, with approximately 80% of solar PV and battery manufacturing and 60% of wind turbine production.
Europe could support Zambia and the DRC in their ambition to expand midstream activity through long-term offtake agreements, financing of processing and energy infrastructure, and industrial and institutional capacity building, among others. In exchange, Europe could increase its access to LME-grade copper cathodes and rods, and battery-grade cobalt for its emerging battery gigafactories, EV manufacturing and renewable energy components. Doing so, the Africa-Europe cobalt and copper trade could increase from less than $2 billion today to $4-5 billion over the next decade.
Case study: West-Africa’s cashew nut industry
However, activities remain largely upstream: more than 70% of production is exported as raw cashew nuts to Vietnam and India. Vietnam, despite limited domestic production (~10% of its processing volumes), accounts for about 70% of Europe’s cashew nut imports, supplying downstream European roasters.
Building on existing initiatives, Europe could support West African countries to expand its midstream capacity. This would enable to increase direct exports of processed cashew kernels from West Africa to Europe, capturing greater value domestically while diversifying Europe’s supply base with lower carbon emissions and improved traceability. Achieving export price competitiveness depends on scaling up processing capacity, monetizing by-products, ensuring energy is reliable and cost-competitive, and closing quality gaps through targeted skilling and technology upgrades. Doing so, the bilateral trade of cashew nuts could increase from approximately $220 million today to $500-800 million over the next decade.
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Contributions by: Marc Gilbert, Philip Carlsson-Szlezak, Vassilis Antoniades, Tycho Moencks,Adwoa Banful, Dominic DeSapio, Mariam El Mansouri
