Afreximbank Launches 2024 African Trade Report and African Trade and Economic Outlook Report today
BusinessNews

African Economies to Grow 3.8% in 2024, Afreximbank Projects

African economies will grow on average by 3.8% in 2024 prior to increasing by 4% next year, according to an African Export-Import Bank (Afreximbank) project.

Afreximbank’s African Trade and Economic Outlook Report 2024 launched today also says the continent’s economies face several downside risks.

Increasing levels of sovereign debt, excessive exposure to adverse terms-of-trade shocks, high commodity prices and inflationary pressures, potential food insecurity, Volatile domestic political environments and escalating geopolitical tensions in some cases are among the risks mentioned in the report.

Despite the challenges, the Afreximbank says the outlook remains positive and most macroeconomic indicators are expected to improve in 2024 and 2025.

Growth in the Continent is projected to be at 3.8 percent,- slightly ahead of predicted global growth of 3.2%.

Although inflation is currently high, it is expected to decrease, with this downward trend continuing into 2025.

Afreximbank’s Group Chief Economist Dr. Yemi Kale said the continent showed resilience to ongoing global challenges that undermined its trade performance.

Per the economist, Africa’s trade contracted by 6.3% in 2023 after expanding by 15.9% in 2022 while Intra-African trade expanded by 3.2% over the same period.

Dr Kale said: “This performance is reflective of the resilience of the African economy and the potential impact of the African Continental Free Trade Area or AfCFTA’s single market for the continent as a tool to protect them from global shocks.”

“Our analysis in the report also revealed large untapped potential in intra-African trade, especially with respect to machinery, electricity, motor vehicles, and food products,” the Chief Economist added.

The analysis is also backed by the African Trade Report 2024, launched by Afreximbank today under the title: ‘Climate Implications of the AfCFTA Implementation.’

This report, the Chief Economist stated, concludes that the AfCFTA offers a path to achieving the developmental goals of African nations while also addressing climate change concerns.

Despite AfCFTA’s benefits, the debate on its impact on climate change is still ongoing.

According to Dr. Kale: “One group believes that increased urbanization and industrialisation associated with the AfCFTA will worsen carbon emissions. The second group believes that by emphasizing intra-African trade and reducing extra-African trade, carbon emissions will be eliminated through shorter shipping distances.”

Overall, the report states that optimizing the AfCFTA can result in potential gains through increased intra-African trade and investment.