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Intra-continental trade levels in Africa lower than ever

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The 2022 Ibrahim Index of African Governance, published this month by the Mo Ibrahim Foundation, dedicates a special section to the Intra-African trade and the African Continental Free Trade Area (AfCFTA). After noting that the majority of African countries in Africa, still today, mainly trades outside the continent than with other African countries, the report observes that intra-continental trade has progressively declined since 2012, reaching in 2021 a percentage of 13% of Africa’s total trade, in comparison to 66.9% in Europe, 63.8% in Asia, and 44.4% in the Americas. Obviously, this percentage does not take into account those cross-border trade transactions that occur informally at African borders, that in some countries are estimated as being even superior to formal trade.

In 2021, for 41 African countries, intra-African trade accounted for less than a quarter of their total trade. A calculation made by the Mo Ibrahim Foundation on the basis of data from UNCTAD, surprisingly, shows that only five African countries have most of their trade within the continent, almost all of them located in Southern Africa. These are Namibia, Botswana, Zimbabwe, Eswatini and Mali.

Transport infrastructure is indicated once again as the main responsible of the poor performances of intra-African trade. The report notes that without the relevant infrastructure to ease movement within the continent, intra-regional trade in Africa will continue to be costly and inaccessible, regardless of tariff reductions. In short, the benefits of the AfCFTA cannot be fully realized without accompanying the implementation of this Agreement with adequate investments in infrastructure.

In terms of regional integration, the Economic Community of West African States (ECOWAS) is indicated as the most advanced in Africa, due to government efforts and open visa regimes. However, from a trade integration perspective, the Southern African Development Community’s (SADC) and the East African Community (EAC) perform better than ECOWAS, as their share of intra-regional trade is over twice that of ECOWAS.

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