The African share of global trade remained at less than three per cent, driven largely by merchandise trade in 2023, a report on the assessment of progress on regional integration in Africa has said.
The report by the Economic Commission for Africa showed that African nations still engage in more trade with countries outside the continent than with each other.
The report showed that despite progress in monetary and financial integration, member states had not met the macroeconomic convergence criteria despite progress in regional integration.
It read, “The African share of global trade remained at less than three per cent, driven largely by merchandise trade, an indicator that African countries continue to trade with the rest of the world more than among themselves.”
It further noted that although the agreement establishing the African Continental Free Trade Area officially started on January 1, 2021, the anticipated improvements in trade between African countries had not materialised.
According to the report, the proportion of intra-African trade relative to worldwide trade decreased from 14.5 per cent in 2021 to 13.7 per cent in 2022.
During this period under review, the share of intra-African exports from 18.22 per cent to 17.89 per cent, and the value of intra-African imports fell from 12.81 per cent to 12.09 per cent.
While progress had been made in the areas of roads and ICT, advancements in rail transport and energy infrastructure had been minimal with financing posing a significant hurdle, it stated.
Speaking on the report, the ECA Director of Regional Integration and Trade Division, Stephen Karingi, noted that unconstitutional changes in government across the continent, unemployment and poverty were top challenges facing the continent.
He said, “The rising number of unconstitutional changes of government highlights the ongoing challenges afflicting African countries, including weak governance, persistent poverty and limited employment opportunities.
“The effective implementation of the agreement will determine the extent to which the continent can derive the benefits of free markets and trade integration for the overall benefit of the people on the African continent.”
Africa continues to grapple with a significant yearly shortfall in infrastructure funding, estimated to be between $130bn and $170bn.
To bridge this gap, pundits have advocated innovative financial mechanisms such as blended finance, bonds focused on environmental, social, and sustainability goals and debt-for-nature swaps are being explored.
SOURCE: PUNCHNG
