According to a report on the assessment of progress on regional integration in Africa, the African share of global trade stayed below three percent in 2023, mainly due to merchandise trade.
The report from the Economic Commission for Africa highlighted that this is mainly driven by merchandise trade, indicating that African countries still trade more with the rest of the world than among themselves.
It showed that despite progress in monetary and financial integration, member states have not met the macroeconomic convergence criteria despite advancements in regional integration.
Despite the official start of the agreement establishing the African Continental Free Trade Area on January 1, 2021, it further noted that the anticipated improvements in trade between African countries had not materialised.
In accordance with the report, the percentage of intra-African trade compared to worldwide trade decreased from 14.5 percent in 2021 to 13.7 percent in 2022.
From 18.22 percent to 17.89 percent, the share of intra-African exports decreased during this period under review, while the value of intra-African imports fell from 12.81 percent to 12.09 percent.
In the domains of roads and ICT, progress had been made, but advancements in rail transport and energy infrastructure had been minimal, largely due to financing obstacles.
Speaking on the report, Stephen Karingi, the ECA Director of Regional Integration and Trade Division, emphasized that unconstitutional changes in government, unemployment, and poverty were the key challenges facing the continent.
Estimates suggest that Africa is dealing with a substantial yearly deficit in infrastructure funding, ranging from $130bn to $170bn.
To bridge this gap, experts have proposed innovative financial mechanisms like blended finance, bonds focused on environmental, social, and sustainability goals, and exploring debt-for-nature swaps.
