Africa’s merchandise trade is set to experience a significant boost in 2024, with the World Trade Organisation (WTO) forecasting a 5.3% increase in trade volume. This growth surpasses the global average of 2.6%, indicating a positive outlook for the continent’s trade prospects.
The report highlights that Africa’s exports are expected to exceed their 2019 levels by the end of this year, marking a significant milestone in the region’s trade recovery. However, imports are projected to only match their previous levels, indicating a need for further growth in consumption and income.
Despite the overall positive outlook, Africa was the only region to experience a decline in imports since 2019, with a cumulative drop of 5%. This suggests that increased export revenue from higher commodity prices did not translate into greater consumption and income in the region.
In an exclusive interview with WTO’s Senior Economist, Coleman Nee, the reasons behind the global trade trends of 2023 and the outlook for 2024 were discussed. Nee highlighted the impact of the ongoing recovery from the pandemic on trade, with commercial services exports showing a 9% increase to $7.54 trillion.
The forecast for merchandise trade growth in 2024 and 2025 has been revised to 2.6% and 3.3% respectively, following a 1.2% decline in 2023. The positive performance is attributed to the easing of inflation and the gradual recovery from the pandemic in various regions.
In terms of goods expected to recover in trade performance, automotive products saw a surge in 2023, while clothing, textiles, and electronics declined. Major economies, particularly in Asia, are expected to drive trade growth, with Europe gradually recovering and contributing to growth in 2025.
Africa is expected to see moderate growth in merchandise trade in 2024, with both export and import volumes increasing. The region’s trade has been flat on average since the pandemic, with imports only expected to surpass their 2019 levels by the end of this year.
Commodity prices will shape the trade outlook for Africa, with implications for both net importers and exporters. Despite ongoing geopolitical tensions and disruptions, global trade has shown resilience, with the potential for trade growth to be impacted by these factors in the coming years.
Overall, while there are risks of deglobalization and fragmentation along geopolitical lines, the impact on trade growth remains uncertain. The future of international trade will depend on how these factors evolve and their implications for global trade dynamics.
