Afreximbank: intra-African trade key to continental growth

African Export-Import Bank (Afreximbank) has launched its African Trade Report 2024 and African Trade and Economic Outlook Report 2024, forecasting greater growth in African economies than the global average

The reports were launched at the Afreximbank Annual Meetings (AAM) 2024 which was held in Nassau, The Bahamas. The latter of which, titled ‘A Resilient Africa: Delivering Growth in a Turbulent World’, analyses the economic environment, trade patterns, debt scenarios and future projections for African economies. One of the key, positive takeways highlighted by the organisation is that African economies are expected to grow on average by 3.8% in 2024 – a figure greater than the predicted global growth of 3.2%. In 2025, Afreximbank forecasts this to climb even higher, reaching 4% growth.

“This performance is reflective of the resilience of the African economy and the potential impact of the African Continental Free Trade Area’s (AfCFTA) single market for the continent as a tool to protect them from global shocks,” explained Yemi Kale, Afreximbank’s group chief economist and managing director of research and international cooperation. “Our analysis in the report also revealed large untapped potential in intra-African trade, especially with respect to machinery, electricity, motor vehicles, and food products.”

The report also revealed that African economies face several downside risks, including increasing levels of sovereign debt and associated sustainability risks, excessive exposure to adverse terms-of-trade shocks, escalating geopolitical tensions in some cases, volatile domestic political environments in certain African countries, high commodity prices and inflationary pressures, and potential food insecurity.

Despite this, the general outlook for Africa in 2024 remains positive with the research suggesting that most macroeconomic indicators are expected to improve in 2024 and 2025.

AfCFTA’s impact

In the African Trade Report 2024, titled 'Climate Implications of the AfCFTA Implementation', it is concluded that the AfCFTA offers a path to achieving the developmental goals of African nations while also addressing climate change concerns, according to the chief economist.

Kale also indicated that while the benefits of the AfCFTA can be seen, the debate on its impact on climate change is still ongoing. He remarked, “One group believes that increased urbanisation and industrialisation associated with the AfCFTA will worsen carbon emissions, and the second group believes that by emphasising intra-African trade and reducing extra-African trade, carbon emissions will be eliminated through shorter shipping distances.”

Overall, the report states that optimising the AfCFTA can result in potential gains through increased intra-African trade and investment, creating economic prosperity and fulfilling the vision of the founding fathers.

Earlier this year, Afreximbank captured headlines by announcing a financing facility to support the Government of Cameroon implement its National Development Strategy. Read more at: https://africanreview.com/finance/cameroon-national-development-strategy-receives-afreximbank-backing