Report projects $1trn export revenue for Nigeria, others by 2035
Financial institution, Standard Chartered Plc, has said that the total exports from Africa will reach about $952bn by 2035 with the potential of being boosted further by about 29 per cent due to the African Continental Free Trade Agreement, AfCFTA.
When fully implemented, AfCFTA, an agreement which Nigeria is a signatory to, is expected to further boost trade by 3 per cent annually from now until 2035.
This was revealed in its ‘Future of Trade: Africa’ report which was released during the 2023 World Bank Group – IMF Annual Meetings taking place in Marrakesh, Morocco.
In a statement accompanying the report, Standard Chartered said, “Rising regional trade levels and greater connectivity will unlock high‑growth corridors across Africa and beyond. Intra-Africa trade is expected to reach $140bn 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 $200bn by 2035,” the Bank said.
On the potentials of the AfCFTA, the lender said that the trade agreement could help overcome challenges of high costs of compliance and administration, by implementing common rules of origin, which grant all 54 AfCFTA members preferential trade access to each other’s markets, to the extent set out in the agreement.
“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, 63 per cent polled said complex and uncertain trade rules are one of the top challenges of intra-African trade. 53 per cent of respondents noted that underdeveloped transportation infrastructure is a key barrier. 51 per cent cited ineffective trade facilitators as another hurdle, whilst 46 per cent noted that limited and/or costly access to capital is a challenge,” the report disclosed.
The Bank said, “Around 90 per cent of respondents believe 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.”
On the technology front, the report said that digitalisation can play an important role in bolstering intra-Africa trade.
The report demonstrated that adopting digital supply chain financing solutions could unlock $34bn of export value in five key African markets by 2035.
Credit: Punch
