A report by financial institution Standard Chartered Plc forecasts that Africa’s total exports will nearly reach $952 billion by 2035, with the potential for further expansion of up to 29% due to the African Continental Free Trade Agreement (AfCFTA). Once fully implemented, AfCFTA is expected to boost trade by 3% annually until 2035.Thank you for reading this post, don't forget to subscribe!
The report, titled ‘Future of Trade: Africa,’ was unveiled during the 2023 World Bank Group – IMF Annual Meetings in Marrakesh, Morocco. According to Standard Chartered, rising regional trade and improved connectivity will create high-growth corridors both within Africa and beyond. Intra-Africa trade is projected to reach $140 billion by 2035, accounting for 15% of Africa’s total exports.
The report also identifies specific growth corridors, with the East Africa-South Asia corridor expected to be the fastest-growing at 7.1% annually through 2035. Additionally, the Middle East-North Africa and the Middle East-East Africa corridors are predicted to have substantial trade volumes, potentially reaching almost $200 billion by 2035.
Standard Chartered believes that the AfCFTA could help address challenges related to compliance costs and administration. By implementing common rules of origin, granting preferential trade access to all 54 AfCFTA member states, the agreement could lead to more efficient intra-African trade. However, the report notes that Africa still faces obstacles, including complex trade rules, underdeveloped transportation infrastructure, and issues with trade facilitation and access to capital. The report suggests that around 90% of respondents believe the AfCFTA can help overcome these challenges.
The report also highlights the role of digitalization in boosting intra-Africa trade. It suggests that implementing digital supply chain financing solutions could unlock $34 billion of export value in five key African markets by 2035.