Africa's role in global trade remains limited, with its contribution accounting for less than 3% of total global trade, according to a recent report by the Economic Commission for Africa (ECA). The report sheds light on the slow progress of regional integration efforts and the persistent challenges hindering Africa's trade and infrastructure development.
African nations primarily engage in trade with countries outside the continent, indicating a lack of significant intra-African trade. This results in Africa's global trade contribution remaining below 3%. The Programme for Infrastructure Development in Africa has seen advancements in sectors like roads and ICT infrastructure. However, progress in rail and energy infrastructure has been minimal, largely due to financing challenges.
Stephen Karingi, Director of the ECA, highlights various obstacles, including political instability, unemployment, and poverty, that impede Africa's trade and infrastructure development efforts. Despite the establishment of the African Continental Free Trade Area (AfCFTA), intra-African trade has experienced minimal growth, declining from 14.5% to 13.7%. This suggests that the AfCFTA has yet to yield significant benefits for intra-African trade.
Africa faces a substantial infrastructure financing gap, estimated at $130–170 billion annually. To address this, there is a need for innovative financial mechanisms to mobilise resources and bridge the infrastructure divide. The report underscores the importance of addressing the challenges hindering Africa's trade and infrastructure development while exploring innovative solutions to unlock the continent's economic potential. Enhanced regional cooperation, strategic investments, and effective policy frameworks are essential to propel Africa towards greater economic integration and sustainable development.
Host: Lekan Onabanjo
Guest: Clive Ramathibela-Smith, Senior Executive Partner, Hecare Capital & Partners, Sandton, Johannesburg, South Africa
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Africa's Trade Challenges and the Path to Economic Integration | Business Edge | 04-03-24
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