According to the brief, the African Continental Free Trade Area (AfCFTA) remains central to efforts aimed at diversifying the continent’s trade base, strengthening regional value chains and increasing intra-African trade.
African Export-Import Bank (Afreximbank) (www.Afreximbank.com) has released Volume 10, Issue 1 of its Trade and Development Finance Brief, titled “Africa’s Trade and Investment Landscape”, which examines the structural challenges shaping Africa’s trade performance and investment outlook in an increasingly uncertain global environment.
The current edition highlights that Africa’s trade landscape remains heavily dominated by export of raw materials, including agricultural products, oil, gas and minerals, while imports continue to be heavily skewed towards manufactured goods and machinery. The Brief notes that the existing export-import configuration leaves many African economies overly exposed to unfavourable terms of trade shock on account of external headwinds, including commodity price volatility, geopolitical tensions and associated global supply chain disruptions.
According to the brief, the African Continental Free Trade Area (AfCFTA) remains central to efforts aimed at diversifying the continent’s trade base, strengthening regional value chains and increasing intra-African trade. The publication notes that, alongside the African Union’s Agenda 2063, the AfCFTA provides a practical framework for integrating fragmented markets, expanding industrial production and boosting productivity, with intra-African exports projected to increase by more than 20 percent within a decade as implementation advances.
Additionally, the brief further highlights the importance of scaling investment in trade-enabling infrastructure, including energy, transport, communications networks, ports and logistics systems, to reduce the cost of doing business and improve cross-border trade flows. It notes that targeted infrastructure investment can support industrialisation, strengthen regional specialisation, and improve Africa’s competitiveness as an investment destination.
The edition also points to a broader set of priorities for strengthening Africa’s trade and investment ecosystem, including regulatory coherence, institutional strengthening, economic diversification, improved access to finance for small and medium-sized enterprises, and greater use of digital financial technologies. The Brief notes that domestic and foreign investment are increasing across many African economies, while fintech is contributing to growth in domestic investment, underscoring the opportunity to build a more resilient, diversified and investment-ready trade landscape.
It also notes that domestic and foreign investment are increasing across many African economies, notwithstanding the observed dominance of foreign investment. It further highlights that the direction of investment flows remains uneven across sub-regions, with Eastern and Southern Africa receiving a larger share of foreign direct investment compared to Western and Central Africa.
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