Africa’s total export is tipped to reach $ 1 trillion according to a new report by Standard Chartered.
The report titled Future of Trade: Africa Report highlights the prospects for trade in Africa and offers a perspective on the African Continental Free Trade Area (AfCFTA) as a vital driver for enhancing intra-African trade.
According to the report, Africa’s overall exports are projected to reach $952 billion by 2035.
Once the AfCFTA is fully enacted, there is the potential to boost this figure by an additional 29%, translating to an annual growth rate of 3% from the present until 2035.
The report further noted that an increase in intra-regional trade and improved connectivity will open new growth corridors for the continent.
Growth in Africa’s major trade corridors
Africa’s trade routes connecting to some of the most dynamic global regions are anticipated to surpass the global average growth rate of 4.3%.
The East Africa-South Asia corridor is poised to lead the way, projecting an impressive annual growth rate of 7.1% through 2035.
Additionally, the Middle East-North Africa and Middle East-East Africa corridors are expected to play a significant role, with their combined trade volume projected to approach nearly USD 200 billion by 2035.
Challenges to Intra-Africa trade
The report surveyed 103 of Africa’s C-level and senior leaders business leaders in the continent and the results of their response showed that Africa faces trade obstacles.
These include complex rules (63%), underdeveloped transportation (53%), ineffective facilitators (51%), and limited access to capital (46%).
Around 90% of respondents believe the AfCFTA can address these issues through initiatives like a reporting mechanism and trade acceleration.
Digitalization is vital for intra-African trade. Adoption of digital supply chain financing (SCF) can unlock USD billion in export value in five key African markets by 2035.
However, 97% are interested in digital SCF solutions but face barriers like resource constraints, technology gaps, and interoperability challenges.
The Group Chairman of Standard Chartered PLC said of the report,
- “Implemented effectively, the African Continental Free Trade Area can radically reshape future growth and development. It will enable higher value-add supply chains and more diversified exports, allowing member states to reduce historical commodity dependence and achieve meaningful progress towards multiple Sustainable Development Goals.”
