The report shows that, the value of intra-African trade reached US$193.17 billion, growing by 18.6 percent in 2022. Intra-African trade, which has been given a boost through the implementation of the African Continental Free Trade Agreement (AfCFTA), is clearly set to redefine Africa’s economic fortunes for the future. The report reaffirms the belief that by lowering barriers to trade in goods and services, the agreement is providing great incentives for those looking to do business across the continent and reduce reliance on the global value chains while setting a new direction for the development of regional value chains. In this context, the AfCFTA, which represents a significant milestone in the journey towards addressing Africa’s trade imbalance is seen as the best economic recovery tool for the continent.
The report notes that, African exports are characterized by few manufactured products which are concentrated in few sectors from a limited number of countries. African countries are urged to extensively invest in the manufacturing sector to accelerate the development of the regional/continental value chains and structural transformation. This is premised on the fact that manufactured products account for about 50% of the continent’s imports.
The report further highlights the fact that a combination of supply chain disruptions, trade restrictions, heightening global tensions, and tightening monetary policy in response to record-high inflation, contributed to major shifts in investor sentiments and led to steep increases in commodity prices during the first half of the year 2022. However, commodity prices declined sharply in the second half owing to softening demand in a context of sharp global growth deceleration especially in China and Europe, the leading drivers of global trade.