Africa is poised to witness a significant economic milestone as exports are expected to approach nearly USD 1 trillion by 2035, driven by the African Continental Free Trade Area (AfCFTA).
The Future of Trade 2023 report outlines the key factors contributing to this surge and highlights the substantial growth potential in intra-regional trade and strategic global partnerships.
Intra-regional trade growth
The report anticipates robust intra-regional trade growth, particularly in West and East Africa. West Africa presents significant potential for the establishment of value chains, focusing on agricultural products such as shea butter and cocoa beans. Initiatives like the West Africa Regional Communications Infrastructure Project are set to enhance connectivity, facilitating increased trade activities.
In East Africa, cross-border infrastructure projects like the Lapsset Corridor Project linking Ethiopia, Kenya, and South Sudan are expected to fuel substantial trade growth in the coming decades.
- West Africa-Central Africa (WA-CA) Corridor: Projected to experience double-digit export growth until 2035, with robust trade between Nigeria and Cameroon driving its success.
- East Africa-Central Africa (EA-CA) Corridor: Recent agreements between Kenya and the Congo Republic, along with the construction of a USD 2.2 billion rail network connecting Tanzania and DR Congo, are poised to boost trade upon completion in 2026.
Global trade dynamics
- Trade with East Asia: Despite geographical distances, Southern Africa and West Africa are expected to witness trade volumes with East Asia exceeding USD 100 billion by 2035. East Asia emerges as the largest trading partner for Central Africa, driven by the region’s abundant reserves of key minerals crucial for renewable energy technologies.
- Corridors to South Asia: Predictions indicate substantial growth in corridors connecting Africa and South Asia. The East Africa-South Asia corridor is projected to grow at an impressive rate of 7.1 per cent annually until 2035, fueled by India’s status as one of the world’s fastest-growing major economies.
While regional trade with Southern Africa is expected to grow moderately, it is forecasted to constitute about two-thirds of total intra-Africa trade by 2035.
The report emphasizes the importance of regional collaborations and the significance of corridors like Kenya-Congo Republic and Tanzania-DR Congo in propelling growth.