Africa’s exports expected to hit nearly $1trn by 2035

BREAKING NEWSOctober 12, 2023 at 11:05 AM UTC

Africa's total exports are projected to reach approximately $952 billion by 2035, driven by the growth of regional trade and enhanced connectivity, according to a new report by Standard Chartered. The full implementation of the African Continental Free Trade Area (AfCFTA) agreement could lead to an additional 29% growth in exports, with an annual growth rate of 3% until 2035.

The AfCFTA aims to create the world's largest free trade area by reducing tariffs among its member countries, connecting over 1 billion consumers across 55 nations with a combined economic value of $3.4 trillion. The World Bank estimates that the trade pact could increase regional incomes by up to 9%, equivalent to $571 billion, and generate nearly 18 million additional jobs, many of which would be higher-paying and of better quality.

Standard Chartered's report also forecasts that intra-Africa trade could reach $140 billion by 2035, constituting 15% of the continent's total exports. This indicates the immense potential and economic benefits that the AfCFTA offers for Africa's growth and prosperity.

Key Takeaways

The AfCFTA represents a significant step towards greater economic integration within the continent, addressing issues arising from multiple, overlapping, or conflicting trade agreements. While it holds immense promise, Africa still faces several challenges in realizing its full trade potential. A survey of over 100 African business leaders revealed that 63% identified complex and uncertain trade rules as a top challenge in intra-African trade. Additionally, 53% pointed to underdeveloped transportation infrastructure, 51% mentioned ineffective trade facilitators, and 46% cited limited and costly access to capital as hurdles to trade. However, around 90% of respondents believe that the AfCFTA has the potential to address these issues. The agreement has already taken steps to overcome barriers through various initiatives, including a reporting mechanism and guided trade initiatives aimed at promoting trade acceleration among member countries. This reflects the collective commitment to overcoming challenges and unlocking the vast potential of intra-African trade.