The World Trade Organisation (WTO) in its trade outlook for 2024 projected that exports from Africa will increase at the fastest pace in 2024 by 5.3% when compared with other regions.
The report noted that the continent’s exports will exceed pre-pandemic levels, but imports will continue to limp as a result of higher energy and commodity prices. Between 2019 and 2023, the continent saw its imports decline by 5%- the worst in the world -meaning that increase in exports did not translate into higher consumption and income across the continent.
The report reads, “If current projections hold, Africa’s exports will grow faster than those of any other region in 2024, up 5.3% from a low base since the continent’s exports remained depressed after the COVID-19 pandemic.”
Trade in digital services
In terms of trade in digital goods, Africa saw growth in its exports of digital goods although it just represented 0.9% of exports in that category.
Overall, global exports of digital services grew by 9% in 2023 to reach $4.25 trillion, representing around 13.8% of the global export of goods and services.
Risks to the outlook
Furthermore, the report projected that global trade would grow by 2.6% this year and 3.3% in 2024 after a decline of –1.2% last year. However, it anticipated certain risks such as geopolitical uncertainties, especially with policies, conflicts in Europe and the Middle East and the attendant effects on global supply chains coupled with climatic change effects in the Panama Canal.
Specifically, the report mentioned trade disruptions in the Suez Canal which handles around 12% of global trade connecting Europe to Asia as a flash point risk in 2024. It stated that the additional 10-day freight to circle around the Cape of Good Hope will result in additional costs to container rates which only began to fall to pre-pandemic levels by the middle of last year.
The report also forecasts a spike in food and energy prices, coupled with elevated interest rate levels across advanced economies, as other risks that could dampen the resurrection of global trade from its negative growth in 2023.