THE African Export-Import Bank (Afreximbank) unveiled its annual African Trade Report (ATR2023) during the bank’s Annual Meeting and 30th Anniversary celebrations in Accra, Ghana. The report, launched by Albert Muchanga, the African Union Commissioner for Economic Development, Trade, Industry and Mining, sheds light on Africa’s growth resilience amidst global challenges.
Despite facing a combination of crises including the lingering effects of the Covid-19 pandemic, record-high inflation, geopolitical tensions, and trade wars, Africa has shown resilience and continued on a growth trajectory. According to the report, Africa’s GDP growth increased by 3.9 percent in 2022, outperforming the global average, while merchandise trade expanded by 20.9 percent, surpassing the world average of 12 percent.
Hippolyte Fofack, Afreximbank’s Chief Economist, attributed the region’s strong trade performance to favourable commodity terms of trade, with rising commodity prices compensating for the relatively modest growth in global trade volume, which increased by 2.7 percent. However, the report emphasises the risk posed by recurring adverse commodity shocks and the continent’s heavy reliance on commodities, with over 80 percent of countries categorised as highly commodity-dependent.
The theme of this year’s trade report, Export Manufacturing and Regional Value Chains in Africa under a New World Order, highlights the potential for export manufacturing-led growth and the development of regional value chains (RVCs) in Africa. The report underscores the importance of accelerating the structural transformation of African economies and leveraging the African Continental Free Trade Agreement (AfCFTA) and realignment of global supply chains to foster RVCs and export-led growth.
Fofack emphasises that export manufacturing-led growth has historically enabled global income convergence, facilitated technology transfers, and supported the integration of regional value chains into global value chains (GVCs). The report asserts that while extra-African trade is dominated by primary commodities, manufactured goods have the potential to drive industrialisation and RVC development within the AfCFTA framework. It calls on African countries to proactively support AfCFTA implementation to stimulate manufacturing output and expedite structural transformation.
Former African Development Bank President, Donald Kaberuka, echoes this sentiment, highlighting the opportunities presented by Africa’s young population, with 70 percent under the age of 30. The report stresses the need for investment in human capital, infrastructure development, research, and digital infrastructure to empower the youth and enable their full potential for innovation and economic growth.
In conclusion, Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, emphasised the importance of concluding negotiations on the rules of origin, prioritising local value-addition to drive technology transfer and RVC development. This, he believes, will diversify sources of growth and enhance Africa’s effective integration into the global economy under the new world order.
Muchanga praised Afreximbank for its commitment to diversifying African exports and establishing itself as a key development finance institution on the continent. He encouraged everyone to read the African Trade Report 2023, stating that it provides timely insights and articulates policies and options to propel Africa towards irreversible structural transformation, fostering sustainable growth and increased participation in global trade.
