British consumer banking biggie Standard Chartered has said in its new report that Africa’s total exports will hit USD 952 billion by 2035. The study also noted the possibility of the continent’s new free trade area making the continent’s overall export numbers even bigger.
‘In its Future of Trade: Africa’ report, Standard Chartered said that a 3% yearly growth rate from now until 2035 would bring the region’s exports to a level that would reach its nearly USD 1 trillion goal.
For better trade within Africa, the study said the African Continental Free Trade Area (AfCFTA) was important and could increase the expected total amount by 29%.
“The problems that have happened in Africa’s supply lines over the last few years have made it even more important to implement the AfCFTA,” said Sunil Kaushal, regional CEO of Standard Chartered Africa Middle East.
It is possible to make this chance come true with the right rules, teamwork, and leadership.
The study stated that AfCFTA is not the first time that Africa’s markets have tried to bring them together, but that the goals of these previous agreements often overlap or are at odds with each other, leading to a “spaghetti bowl effect” of many trade agreements that are hard to understand.
The new free trade area legally opened for business in Africa at the beginning of 2021. However, it will likely be years before the bloc is fully operational.
In October 2023, the International Monetary Fund and the World Bank held their yearly meetings in Marrakech, Morocco. At the meetings, they released a report that said trade within Africa would reach USD 140 billion by 2035, which would be 15% of all exports from Africa.
The study says that trade routes connecting Africa to some of the world’s most dynamic areas will grow faster than the average of 4.3% around the world.
At 7.1% per year until 2035, the East Africa-South Asia route is expected to become the major hub with the fastest growth.
Also, the trade between the Middle East and North Africa and the Middle East and East Africa will be very important. By 2035, they will bring in a total of almost USD 200 billion.
The study says that a poll of more than 100 business leaders in Africa found that 53% said poor transportation infrastructure and complicated and uncertain trade rules were two of the biggest problems with trade within Africa.
A lot of people (about 90%) said they thought the AfCFTA could solve most of the problems that make it hard to trade on the continent.