The Tanzania-Malawi bilateral trade agreement signed February 16 reveals a fundamental flaw in Africa's integration strategy. While officials celebrate simplified procedures for small-scale traders, Tanzania markets are already surging without continental frameworks. Transit goods volume jumped 33.8% to 13.6 million tonnes in 2025, and approved investment capital nearly tripled to US$10.95 billion from US$3.7 billion in 2021.

Bilateral Deals Trump Continental Vision

This bilateral approach undermines the African Continental Free Trade Area's promise of harmonized standards. Tanzania and Malawi are essentially admitting that AfCFTA mechanisms don't work for practical trade facilitation. The focus on "small-scale traders" sounds progressive but masks a deeper problem: major investors still face fragmented regulatory environments.

Tanzania's manufacturing sector attracted 417 projects worth US$4.6 billion, creating nearly 62,000 jobs. Yet investors must navigate country-specific transfer pricing regulations and thin capitalization rules that vary dramatically across borders. The Tanzania Investment and Special Economic Zones Authority oversees these projects under national frameworks, not continental ones.

This suggests that serious money flows through bilateral channels while AfCFTA remains ceremonial. Foreign direct investment reached US$1.72 billion in 2024, up from US$1.63 billion in 2023, driven by bilateral relationships and national investment promotion agencies.

The Real Integration Test

The risk is that bilateral deals create competing regulatory standards rather than harmonized ones. Each agreement establishes different procedures, documentation requirements, and dispute resolution mechanisms. This fragments the continental market that AfCFTA promised to create.

Expect more bilateral announcements as countries abandon hope for continental harmonization. The Tanzania-Malawi deal sets a precedent: practical integration happens country-by-country, not through Addis Ababa declarations.

Investors should focus on bilateral investment treaties and national regulatory frameworks. Continental integration remains a political slogan, not an investment reality.