Afreximbank unveils African trade, economic outlook for 2024

Marwa Tawfik , Friday 14 Jun 2024

African Export-Import Bank (Afreximbank) launched its latest economic reports – African Trade Report 2024 and African Trade and Economic Outlook Report 2024 – at the Afreximbank Annual Meetings (AAM) 2024 held on Friday in Nassau, The Bahamas.

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The latter report forecasts that African economies will grow on average by 3.8 percent in 2024 – slightly outpacing the predicted global growth of 3.2 Percent.

According to the report, the growth is expected to maintain the upward curve reaching 4 percent in 2025.

The report, titled ‘A Resilient Africa: Delivering Growth in a Turbulent World’, analyses the economic environment, trade patterns, debt scenarios, and future projections for African economies.

Yemi Kale, Afreximbank’s Group Chief Economist and Managing Director of Research and International Cooperation, said ongoing global challenges undermined the performance of Africa’s trade, decreasing it by 6.3 percent in 2023, down from 15.9 percent in 2022.

However, intra-African trade expanded by 3.2 percent over the same period, Kale noted.

“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,” Kale said.

“Our analysis in the report also revealed large untapped potential in intra-African trade, especially in machinery, electricity, motor vehicles, and food products,” he continued.

The report also revealed that African economies face several downside risks, including increasing levels of sovereign debt and associated sustainability risks, and excessive exposure to adverse terms-of-trade shocks.

The risks also include escalating geopolitical tensions in some cases, volatile domestic political environments in certain African countries, high commodity prices and inflationary pressures, and potential food insecurity.

The outlook for the African Continent in 2024 remains positive despite the challenging economic environment of 2023, with most macroeconomic indicators expected to improve in 2024 and 2025.

Furthermore, Growth across Africa is projected to exceed the global average.

Inflation, though currently high, is expected to trend downward over the coming two years.

 

The African Trade Report 2024 —titled Climate Implications of the AfCFTA Implementation – concludes that the AfCFTA offers a path to achieving the developmental goals of African nations while also addressing climate change concerns, said Kale.

He said that while the benefits of the AfCFTA are evident, the debate on its impact on climate change remains ongoing.

“One group believes that increased urbanization and industrialization associated with the AfCFTA will worsen carbon emissions, and the second group believes that by emphasizing intra-African trade and reducing extra-African trade, carbon emissions will be eliminated through shorter shipping distances,” he added.

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.

 

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