Standard Chartered report has revealed that Africa's total exports are expected to hit close to $1 trillion by 2035.
Standard Chartered published its Future of Trade: Africa report, highlighting the outlook for African trade and providing a view of the African Continental Free Trade Area (AfCFTA) as a key proponent of optimising intra-African trade.
The report finds that Africa's total exports will reach $952 billion by 2035 and the AfCFTA, once fully implemented, has the potential to increase this figure by a further 29 per cent. This represents an annual growth rate of three per cent from now until 2035.
Rising regional trade levels and greater connectivity will unlock highgrowth corridors across Africa and beyond. Intra-Africa trade is expected to reach $140 billion by 2035, equating to 15 per cent 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 per cent. The East Africa-South Asia corridor is expected to emerge as the fastest-growing major corridor, at 7.1 per cent per annum through to 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 $200 billion by 2035.
Africa however still has barriers to overcome to realise the full potential of its trade opportunity. Based on a survey conducted with over 100 of Africa's business leaders, around 90 per cent of respondents believed the AfCFTA can address most of these issues. Progress has been made in this regard, with the AfCFTA taking steps to address barriers through various initiatives, such as a reporting mechanism and a guided trade initiative to accelerate trading amongst countries. Digitalisation also plays an important role in bolstering intra-Africa trade.
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The report demonstrated that adopting digital supply chain financing (SCF) solutions could unlock $34 billion of export value in five key African markets by 2035.
Group chairman of Standard Chartered, Dr José Viñals said, "implemented effectively, the African Continental Free Trade Area can radically reshape future growth and development. It will enable higher value-add supply chains and more diversified exports, allowing member states to reduce historical commodity dependence and achieve meaningful progress towards multiple Sustainable Development Goals.
"Through our global footprint, local expertise and innovative solutions, we are committed to supporting the development of the right policies, securing cooperation, and applying technology and capital in order to build better connections within the continent, and beyond."
Regional CEO, Standard Chartered Africa Middle East, Sunil Kaushal said, "the disruptions to Africa's supply chains over the last few years have amplified the urgency to implement the AfCFTA.
"At the same time, the findings of our report outline the requirements to exponentially bolster Africa's exports, which the AfCFTA would benefit greatly. With the right regulations, collaboration, and governance, this opportunity can be made a reality.
"For over 150 years, Standard Chartered has supported Africa's growth and progress, actively contributing to the continent's infrastructure development and economic advancement. We will continue to work with the relevant stakeholders in driving trade throughout the continent and ensuring Africa's sustainable economic development."
