Afreximbank launches Africa trade report

The Africa Export Import Bank has recently released the 2023 African Trade Report, shedding light on key themes and opportunities for the continent in the realm of global trade. The report, launched during the bank's annual meetings, delves into the theme of export manufacturing and regional value chains under a new world order. Dr. Hippolyte Fofack, the Chief Economist of the bank, highlighted the significance of this year's report and the opportunities it presents for Africa. One of the focal points of the report is the concept of reshoring or localizing supply chains, a trend driven by rising geopolitical tensions and great power rivalry. This shift has the potential to derail global growth but also opens up new avenues for the African continent. Africa, historically marginalized from global supply chains, now has the opportunity to capitalize on rising labor costs in Asia and geopolitical considerations to diversify supply chains and enhance supply chain resilience. The implementation of the African Continental Free Trade Agreement (AFCFTA) further positions Africa to integrate into global value chains, not just as suppliers of raw materials, but as value-adding contributors to production processes. The report emphasizes the potential for Africa to leverage its competitive advantages and become a key player in the global trade landscape. Another key focus in the report is the development of regional value chains and intra-African trade. Currently accounting for less than 1% of global distribution manufacturing, Africa has ample room for growth in this sector. By enhancing intra-African trade and industrialization, the continent can pave the way for exponential growth in manufacturing. Dr. Fofack highlighted the importance of sectors like automotive, where Africa has the resources and potential for regional value chain development. The bank is actively working to promote coordination and cooperation across countries and regions to boost manufacturing output and drive economic growth. Furthermore, the report underscores the concept of commodity-based industrialization, shifting from the export of raw materials to local value addition. By transforming commodities locally and adhering to the rules of origin outlined in the AFCFTA, Africa can expand its manufacturing output and create employment opportunities. Dr. Fofack also discussed the bank's efforts to harmonize industry standards and norms, particularly in the automotive sector, to facilitate international trade and enhance the manufacturing landscape. The annual meeting, which coincided with the bank's 30th anniversary, focused on building prosperity for Africans and fostering economic growth through collaboration with regions like the Caribbean. The conference highlighted the potential of intercontinental partnerships to drive growth and create win-win outcomes for all stakeholders. Despite the challenges posed by COVID-19 and geopolitical tensions, Dr. Fofack remains optimistic about Africa's trade outlook. The continent has demonstrated resilience in the face of global economic fluctuations, with African trade expanding by more than 20% in contrast to weakened global trade. The report forecasts promising growth prospects for Africa, citing the realignment of global supply chains and the AFCFTA as major catalysts for economic advancement. Dr. Fofack's insights offer valuable perspectives on the opportunities and challenges that lie ahead for Africa in the evolving landscape of global trade.