Report highlights significant untapped potential in intra-African trade

A recent report by the Africa Export-Import Bank (Afreximbank) has revealed significant untapped potential in intra-African trade, particularly in machinery, electricity, motor vehicles and parts, food products, minerals, beauty products, chemicals, plastic and rubber, ferrous metals, pearls and precious stones and fertilizers.

The Africa Trade Report identified Southern Africa as the sub-region with the most substantial export potential, followed by Eastern, Western, Northern and Central Africa.

“At the country level, South Africa, with its well-diversified economy, accounted for 20.4 percent of total intra-African trade in 2023. This is reflected in the consolidated performance of Southern Africa as the highest regional contributor, representing 41.1 percent of total intra-African trade,” the report stated.

Forecasts indicate that world output will expand at a pace of 3.2 percent in 2024, with global merchandise trade projected to grow by 2.6 percent, recovering from a 1.2 percent contraction in 2023.

Despite sluggish economic activity in developed economies, Africa’s growth prospects are expected to increase marginally to 3.5 percent in 2024 from 3.2 percent in 2023, with the volume of African trade forecast to rise.

The report projects Africa’s exports will grow faster than any other region, at a rate of 5.3 percent in 2024, up from 3.1 percent in 2023.

Imports are expected to rebound at 4.4 percent in 2024 after contracting by 2.4 percent in 2023.

The recovery of African trade is anticipated to be driven by continuous dynamics in the commodity market, particularly with high oil prices.

Geographical diversification of trading partners and growing South-South trade are also expected to mitigate risks and support the continent’s trade recovery.

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