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African nations are poised for a significant transformation in their export and trade landscape, as revealed by Standard Chartered Bank in its survey on the export potentials of AfCFTA by 2035. The survey says that exports would touch US$1 trillion by 2035
African nations are poised for a significant transformation in their export and trade landscape, as revealed by Standard Chartered Bank in its survey on the export potentials of AfCFTA by 2035. The survey says that exports would touch US$1 trillion by 2035. The Africa report highlighted the outlook for African trade and provided a view of the African Continental Free Trade Area (AfCFTA) as a key factor for optimizing intra-African trade.
The report finds that Africa’s total exports will reach US$952 billion by 2035 and the AfCFTA, once fully implemented, has the potential to increase this figure by a further 29%. This represents an annual growth rate of 3% from now until 2035.
Rising regional trade levels and greater connectivity will unlock high-growth corridors across Africa and beyond. Intra-Africa trade is expected to reach US$ 140 billion by 2035, equating to 15% of Africa’s total exports. Africa’s corridors with some of the world’s most dynamic regions will grow faster than the global average of 4.3%. The East Africa-South Asia corridor is expected to emerge as the fastest-growing major corridor, at 7..1% per annum through 2035. The Middle East-North Africa and the Middle East-East Africa corridors will also be substantial, with their combined trade volume expected to reach almost USD200 billion by 2035.
The AfCFTA is not the first attempt made by Africa’s markets to promote greater cohesion, but the existing agreements often have overlapping or contradicting objectives – creating a “spaghetti bowl effect”, the report says. There are eight significant Regional Economic Communities (RECs) recognized by the African Union (AU), and most AU markets are enrolled in two or more RECs, with the high costs of compliance and administration making intra-Africa trade less competitive. AfCFTA could help overcome this by implementing common rules of origin, which grant all 54 AfCFTA members preferential trade access to each other’s markets, to the extent set out in the agreement.
Read Also:
https://trendsnafrica.com/tabef-calls-for-successful-and-effective-implementation-of-the-afcfta/
https://trendsnafrica.com/afcfta-to-hike-up-africas-export-standard-chartered-bank/
Africa however still has barriers to overcome to realize the full potential of its trade opportunity. Based on a survey conducted with over 100 of Africa’s business leaders, 63% polled said complex and uncertain trade rules are one of the top challenges of intra-African trade. Fifty-three percent of respondents noted that underdeveloped transportation infrastructure is a key barrier. Fifty-one percent cited ineffective trade facilitators as another hurdle, whilst 46% noted that limited and/or costly access to capital is a challenge.
