In this article, the Great Lakes region refers primarily to the interconnected economies of eastern Democratic Republic of the Congo (DRC), Rwanda, Burundi and Uganda.
The Great Lakes region possesses substantial mineral, agricultural, water and energy resources, yet poverty, conflict and weak infrastructure continue to constrain its development. This article examines whether the African Continental Free Trade Area (AfCFTA) can alter that trajectory.
The article argues that AfCFTA can translate the region’s resource wealth into shared prosperity only if trade liberalisation is accompanied by parallel investment in energy generation, transport corridors, local processing capacity, small-enterprise development and resource governance, and by a security environment in which such investment can be sustained. Tariff reduction addresses only one of several constraints that jointly determine whether natural wealth is converted into industrial value.
The analysis proceeds in four steps: it outlines the region’s resource endowment and the paradox it generates; examines the structural constraints on converting that endowment into value; assesses what AfCFTA can and cannot contribute; and sets out the conditions and regional implications of a successful transformation.
A Region of Paradox
The Great Lakes region holds mineral reserves of considerable global importance (World Bank, 2020). Its lakes support millions of livelihoods through water, fisheries and agriculture, and its rivers offer hydropower potential well beyond what is currently harnessed (Food and Agriculture Organization of the United Nations [FAO], 2021). Located at the intersection of several African markets, the region appears well placed for economic growth. Yet this endowment has not translated into broad-based prosperity: a substantial share of the population, particularly in rural areas, continues to live in poverty (World Bank, 2022). This divergence between resource wealth and material outcomes constitutes the central paradox that this article examines.
The paradox acquires new significance as AfCFTA gathers momentum. The agreement seeks to ease trade between African states by progressively lowering tariffs, simplifying cross-border commerce and encouraging African firms to trade across the continent (African Union, n.d.). A trade agreement alone, however, cannot resolve the paradox. For AfCFTA to benefit the Great Lakes region substantively, its economies must acquire the capacity to produce, process and transport considerably more than they do at present. The analytical question is therefore not whether the region is resource-rich, which the evidence already establishes, but whether this wealth can be converted into industry, employment, enterprise and infrastructure rather than continuing to leave the region as unprocessed raw material.
The Strategic Value of the Region’s Resources
The DRC, Rwanda, Burundi and Uganda hold resources of considerable global strategic importance. The DRC is the clearest case: it is the world’s leading producer of cobalt, accounting for approximately 75% of global mined production in 2024 (U.S. Geological Survey, 2025). Cobalt is a key input for batteries and other energy-transition technologies, and demand is expected to remain strong as electric-vehicle adoption and energy-storage capacity expand (International Energy Agency, 2023).
It is here that the paradox originates: ownership of a strategic raw material does not, in itself, secure the wealth that the material generates. Value is added at each stage of the production chain (extraction, processing, manufacturing, sale and consumption), and the further a commodity moves from extraction towards refining and manufacturing, the greater the potential for domestic value capture (United Nations Conference on Trade and Development [UNCTAD], 2021). Where a producing country limits its role to extraction and export, the larger share of value added is typically captured downstream by economies with established processing and manufacturing capacity.
Structural Constraints on Converting Wealth into Value
It would be analytically insufficient to attribute the region’s underperformance solely to underinvestment or poverty. The underlying explanation is more structurally complex: conflict and insecurity, unreliable electricity supply, inadequate road networks, costly border procedures, limited access to finance and weak institutions interact and reinforce one another, jointly preventing natural-resource wealth from translating into shared prosperity.
1. Conflict and Insecurity
In parts of the region, notably eastern DRC, conflict has severely disrupted economic activity (International Crisis Group [ICG], 2022). Insecurity raises the cost of trade as well as the risk to life: goods move less freely and at higher cost along insecure roads; mines in unstable areas raise questions of governance and territorial control alongside their economic function; and border closures during political crises can suspend the livelihoods of large numbers of traders (World Bank, 2021).
The relationship between natural resources and conflict is conditional rather than deterministic. The literature associates resource dependence with a heightened risk of conflict where it coincides with weak institutions and political rivalries (Auty, 1993; Collier & Hoeffler, 2004), although the strength of that association remains contested. In the Great Lakes, these dynamics are compounded by land disputes, informal trade networks and wider security instability (ICG, 2022). Under such conditions, a resource that could finance development may instead become an object of contestation and a source of vulnerability.
The appropriate policy response is therefore not disengagement from resource extraction but reform of how resources are governed, taxed and processed, with greater transparency, stronger revenue oversight and a larger share of the benefits reaching local communities (Organisation for Economic Co-operation and Development, 2020).
2. Border Costs and Informal Trade
The Great Lakes economy operates not only through aggregate trade flows but also through small-scale, everyday exchange: traders carrying farm produce across borders, farmers seeking markets for their harvests, and small entrepreneurs sourcing goods from neighbouring countries. At the Goma–Gisenyi border, World Bank figures indicate that the Petite Barrière crossing point handles tens of thousands of pedestrian crossings each day, and that women account for the large majority of small-scale traders (World Bank, n.d.). African economic integration is therefore not merely a policy aspiration; it already operates within daily economic life.
This everyday economy remains constrained, however, by customs procedures, repeated inspections, weak infrastructure, insecurity and high transport costs. A few additional hours at the border, or an unanticipated fee, can eliminate a small trader’s margin; for perishable goods, delay can mean total loss (Titeca & Kimanuka, 2012).
The Contribution of AfCFTA
AfCFTA’s stated ambitions, as articulated in official discourse, include easing trade between African countries, lowering tariffs, simplifying customs procedures, encouraging investment, supporting industrialisation and building African value chains (African Union, n.d.). The agreement thus tests whether Africa can produce more for African markets; whether implementation will match these ambitions is a separate empirical question.
This matters in particular for the Great Lakes, a region already positioned at the crossroads of several economies: the DRC trades with Rwanda, Rwanda connects to Uganda and Burundi, and Uganda links into East Africa’s wider markets. Cross-border trade between these countries already exists, much of it informal, as research on the region’s borderlands shows (Titeca & Kimanuka, 2012). AfCFTA’s potential contribution lies in formalising this exchange within a structured regional framework, allowing firms to source raw materials in one country, process them in another and sell finished goods across several African markets (United Nations Economic Commission for Africa, 2021).
Africa’s demographic and market potential is considerable, underpinned by a large and growing population and an expanding middle class (African Development Bank [AfDB], 2022). A large market, however, is of limited value if member states lack the productive capacity to supply it. AfCFTA should therefore be assessed not only by whether it enables African states to sell more, but by whether it incentivises them to produce more, and at higher value.
Cobalt again illustrates the point. Under one model, a country extracts the ore, exports it unprocessed and imports finished goods manufactured abroad, retaining ownership of the raw material alone. Under a more ambitious model, it processes a greater share domestically, builds industrial capacity and exports higher-value goods, thereby acquiring a portion of the value chain itself, with potential gains in employment, technical skills and tax revenue and reduced dependence on raw exports.
The Limits of Trade Liberalisation
It would be analytically naive to assume that a free trade area will, on its own, resolve the region’s structural economic constraints. Market liberalisation does not build factories, the removal of trade barriers does not construct roads, easier trade does not generate electricity, and the free movement of goods does not by itself guarantee security. A further risk is that weaker domestic firms may face intensified competition without the means to withstand it: a small enterprise operating with high electricity costs, poor road access and limited credit cannot readily compete with a firm based in a more developed industrial environment (Rodrik, 2018).
The relevant question is therefore not only how markets should be opened but how African producers can be made competitive enough to benefit from that opening. This requires governments to support enterprise development, upgrade infrastructure, widen access to finance and, where warranted, provide temporary protection to strategic sectors (UNCTAD, 2022). Such protection is contested in the trade-policy literature, and its design determines whether it fosters competitiveness or entrenches inefficiency.
Five Conditions for Converting Resources into Prosperity
The preceding analysis points to five interdependent conditions, each of which addresses a distinct constraint on value creation.
1. Reliable Electrcity: Industrialisation is not feasible without a stable energy supply. Factories, technology firms, warehousing, mineral processing, agricultural cold chains and digital infrastructure all depend on reliable power. The region possesses substantial hydropower potential, but the binding constraint lies less in the resource itself than in the capacity to generate, transmit and distribute it reliably (AfDB, 2023). In the absence of stable power, businesses rely on costly generators, which raises production costs and weakens competitiveness against imports.
2. Economic Corridors: A regional economy cannot function without roads, railways, ports, border posts and digital networks linking zones of production to markets. High transport and logistics costs remain a major constraint on trade in landlocked and infrastructure-poor areas (World Bank, 2021), and improved corridors could substantially reduce the cost of doing business across the region. The relevant chain runs from mine to road, railway, border, market, factory and consumer, and a single weak link constrains the entire system: a poor road inflates the price of farm goods, an inefficient border slows trade, and the absence of rail forces reliance on more expensive road transport.
3. Local Processing: Perhaps the most strategically significant task is the transition from an extraction-based economy to a processing-based one. In mining, this requires investment in refining capacity, processing infrastructure, technical training, testing laboratories and mineral-linked manufacturing. In agriculture, it requires a shift from selling raw crops to processing, packaging and marketing them for regional markets, since processed agricultural products generally capture more value than raw commodities (FAO, 2022). Value addition is therefore central to any developmental strategy for the region.
4. A Substantive Role for Small and Medium Enterprises: A regional economy cannot rest on a small number of large multinational firms alone. Small and medium enterprises (SMEs) create employment and distribute growth across urban and rural areas, but they require improved access to finance, training, digital tools, markets and legal protection. Women and young people already constitute a significant share of cross-border traders (World Bank, n.d.), yet they face particular constraints, including limited access to credit, harassment at border crossings and restricted access to information, which require targeted policy attention rather than general acknowledgement.
5. Better Governance of Resources: No economic strategy can succeed in the absence of strong institutions. Resource wealth must be matched by transparency, effective taxation, oversight, accountability and redistribution into roads, schools, hospitals, electricity, training and enterprise development (Natural Resource Governance Institute [NRGI], 2021). Communities located near extraction sites need to see tangible benefits in the form of employment, services and local investment; absent these, the region’s core paradox persists: a territory rich in resources whose population does not share proportionately in that wealth.
Peace as an Economic Precondition
Peace is conventionally framed as a political or humanitarian concern, but in the Great Lakes it is also an economic precondition that cuts across each of the five conditions above. Firms will not invest where operational continuity cannot be assured, traders cannot expand if they risk losing goods in transit, factories cannot operate reliably without security, and farmers cannot sustain viable operations if market access is unpredictable (ICG, 2022). Peace therefore functions as economic infrastructure: without it, every other category of infrastructure operates below capacity. A road may be built, but its utility is limited if transporters fear using it; a border post may be modernised, but trade volumes will remain constrained if traders do not feel safe.
Regional Complementarity
A further analytical question is why individual states should attempt to build an entire production chain independently. Endowments are unevenly distributed: one country may hold raw materials, another industrial expertise, another a stronger logistics position and another a larger consumer market. Rather than treating neighbouring states primarily as competitors, Great Lakes countries could draw more fully on the logic of economic complementarity that underpins regional value chains, in which each state contributes a distinct stage of production and the region as a whole benefits.
A mineral could be extracted in one country, processed in another and used by a manufacturer in a third; agricultural products could be grown in one zone, processed in another and sold across several markets. Such integration would, however, depend on sustained political commitment across member states (East African Community, 2023), and states with differentiated strategic interests may contest where processing capacity is located and how its benefits are distributed. If implemented effectively, this model could gradually establish the Great Lakes as an integrated economic space.
An Opportunity with Conditions
AfCFTA arrives at a particular conjuncture: global demand for strategic minerals is rising, Africa holds a substantial share of the resources required for the energy transition, the continent has a comparatively young population, African markets are expanding, regional infrastructure is advancing, and intra-African trade retains considerable room for growth (Afreximbank, 2023). These conditions constitute the elements of an opportunity, but they have not yet been assembled into a coherent regional strategy.
AfCFTA can open the institutional pathway, but Great Lakes states must construct the conditions that make that pathway usable: generating power, training workers, financing enterprise, securing trade corridors, modernising borders, processing raw materials and building industrial capacity. Above all, this requires regional cooperation robust enough that shared economic interest consistently outweighs political rivalry, a condition that recent regional history suggests cannot be assumed (ICG, 2023).
Conclusion
This article has argued that the Great Lakes region’s economic future depends less on the scale of its resource endowment, which is well established, than on its capacity to convert that endowment into industrial value through reliable energy, functioning corridors, local processing, viable small enterprise and credible resource governance, underpinned by a security environment in which investment can be sustained. AfCFTA can supply the trade architecture for this transformation, but it cannot by itself supply the productive capacity or the political stability on which that capacity depends.
Three implications follow for the region’s economic and geopolitical trajectory. First, sequencing matters: liberalisation that outpaces investment in energy, infrastructure and enterprise capacity risks entrenching the region’s position as a supplier of unprocessed raw materials rather than altering it. Second, regional integration is as much a political as an economic project, since the distribution of processing capacity and value among member states will reflect negotiation between actors with differing interests. Third, responsibility for converting resource wealth into broad-based prosperity (whether it rests principally with national governments, private enterprise, foreign investors, regional institutions or communities themselves) remains an open question, and answering it with precision would require sustained empirical research on the political economy of resource governance in the region. Whether AfCFTA becomes a vehicle for regional industrial transformation or reproduces existing extractive patterns will depend on how these questions are resolved
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