According to a report by Standard Chartered, it is projected that Africa’s total exports will reach nearly $1 trillion by 2035. The report, titled “Future of Trade: Africa,” emphasizes the potential of the African Continental Free Trade Area (AfCFTA) in optimizing intra-African trade.
The report predicts that Africa’s total exports will amount to $952 billion by 2035, and the full implementation of the AfCFTA has the potential to increase this figure by an additional 29 percent. This translates to an annual growth rate of three percent from now until 2035.
The growth of regional trade and improved connectivity will unlock high-growth corridors across Africa and beyond. Intra-Africa trade is expected to reach $140 billion by 2035, accounting for 15 percent of Africa’s total exports.
Africa’s corridors with some of the world’s most dynamic regions are projected to grow faster than the global average of 4.3 percent. The East Africa-South Asia corridor is anticipated to be the fastest-growing major corridor, with an annual growth rate of 7.1 percent until 2035. The Middle East-North Africa and Middle East-East Africa corridors will also be significant, with their combined trade volume expected to reach nearly $200 billion by 2035.
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However, Africa still faces barriers that need to be overcome in order to fully realize its trade potential. Based on a survey conducted with over 100 African business leaders, approximately 90 percent of respondents believe that the AfCFTA can address most of these issues. Progress has already been made in this regard, with the AfCFTA implementing initiatives such as a reporting mechanism and a guided trade initiative to facilitate trade among countries. Digitalization also plays a crucial role in strengthening intra-Africa trade.
The report has demonstrated that the adoption of digital supply chain financing (SCF) solutions has the potential to unlock $34 billion of export value in five key African markets by 2035.
Dr José Viñals, the Group Chairman of Standard Chartered, stated that the effective implementation of the African Continental Free Trade Area has the power to significantly reshape future growth and development. This will allow for the establishment of higher value-add supply chains and more diversified exports, enabling member states to reduce their historical dependence on commodities and make meaningful progress towards multiple Sustainable Development Goals.
He further emphasized that Standard Chartered is committed to supporting the development of appropriate policies, fostering cooperation, and utilizing technology and capital to establish stronger connections within the continent and beyond. This commitment is backed by their global presence, local expertise, and innovative solutions.
Sunil Kaushal, the Regional CEO of Standard Chartered Africa Middle East, highlighted the urgency to implement the AfCFTA due to the disruptions experienced by Africa’s supply chains in recent years. He also emphasized that the findings of the report outline the necessary requirements to significantly boost Africa’s exports, which would greatly benefit from the AfCFTA. With the right regulations, collaboration, and governance, this opportunity can become a reality.
Standard Chartered has been actively supporting Africa’s growth and progress for over 150 years, contributing to the development of the continent’s infrastructure and economic advancement. They will continue to collaborate with relevant stakeholders to drive trade across the continent and ensure sustainable economic development for Africa.
