Africa’s exports to reach $1 trillion by 2035

A new report released by Standard Chartered has cast a hopeful light on the future of Africa’s trade landscape, with projections that Africa’s total export could potentially reach a significant milestone of $1 trillion.

This report, titled “Future of Trade: Africa Report,” delves into the prospects for trade within the African continent and provides insights into the role of the African Continental Free Trade Area (AfCFTA) as a pivotal driver for bolstering intra-African trade.

The report outlines that Africa’s overall exports are poised to ascend to $952 billion by 2035. The full enactment of the AfCFTA presents a promising opportunity to enhance this figure by an additional 29%, which translates into an annual growth rate of 3% from the present time until 2035. This represents a significant leap forward in the context of African trade.

Moreover, the report underscores that an increase in intra-regional trade and enhanced connectivity are expected to open up new growth pathways and corridors for the African continent. This promising outlook paints a vivid picture of the potential for Africa to realize its trade ambitions.

Growth in Africa’s Major Trade Corridors
The report sheds light on Africa’s trade routes, which are interconnected with some of the most dynamic global regions, and projects that they are set to outperform the global average growth rate of 4.3%. Among these trade corridors, the East Africa-South Asia route stands out with an impressive annual growth rate projection of 7.1% through 2035.

Additionally, the Middle East-North Africa and Middle East-East Africa corridors are positioned to play pivotal roles in the trade landscape, with their combined trade volume expected to approach nearly USD 200 billion by 2035. This growth trajectory further underlines the significant potential and importance of these trade routes in the African context.

Challenges to Intra-Africa Trade
The report delves into some of the significant trade-related challenges that Africa currently faces. It is based on a survey of 103 C-level and senior business leaders from across the continent. The findings indicate that Africa encounters a range of trade obstacles, including complex trade rules (63%), underdeveloped transportation infrastructure (53%), ineffective facilitation processes (51%), and limited access to capital (46%). These challenges underscore the need for coordinated efforts and initiatives to streamline and enhance the trade environment.

One notable aspect highlighted by the survey is that approximately 90% of respondents believe that the AfCFTA holds the potential to address these challenges through various initiatives, including the introduction of a reporting mechanism and mechanisms for accelerating trade.

Digitalization: A Vital Enabler for Intra-African Trade
The report underscores the importance of digitalization for promoting and facilitating intra-African trade. It highlights that the adoption of digital supply chain financing (SCF) holds the potential to unlock billions of dollars in export value across five key African markets by 2035. This is a clear indication of the transformative power of digital technologies in advancing trade capabilities.

However, the report notes that while 97% of the surveyed business leaders express interest in digital SCF solutions, they also face challenges and barriers in this endeavor. These challenges include resource constraints, technology gaps, and interoperability issues, all of which must be addressed to fully harness the potential of digitalization in trade.

The Vision of Standard Chartered
The Group Chairman of Standard Chartered PLC, in response to the findings of the report, emphasized the transformative potential of the AfCFTA when implemented effectively. He noted that the AfCFTA has the capacity to reshape future growth and development in Africa significantly. By enabling higher value-add supply chains and diversifying exports, member states can reduce their historical dependence on commodities and make substantial progress toward achieving multiple Sustainable Development Goals. This vision underscores the pivotal role that trade can play in driving sustainable development across the continent.

In conclusion, the “Future of Trade: Africa Report” by Standard Chartered offers a comprehensive overview of the promising prospects for African trade, with a clear emphasis on the role of the AfCFTA in bolstering intra-African trade. While challenges exist, the report underscores that with coordinated efforts, digitalization, and the right initiatives, Africa can unlock its potential and realize its ambitious trade goals. This transformative journey is poised to not only enhance trade but also contribute to the broader goals of sustainable development on the continent.