- Kenya-DRC and Tanzania-DRC Corridors have been identified as the key links that will drive East Africa trade.
- Within the Southern Africa region, higher integration will drive its share of total intra-Africa exports to a third by 2035.
- The MENA Region and the Middle East-East Africa corridors will also be substantial, with combined trade volume expected to reach almost USD200 billion by 2035.
Increased infrastructure interconnectivity by the African states has been identified as the key driver that will lead to success of the African Continental Free Trade Area (AfCFTA). Kenya-DRC and Tanzania-DRC Corridors have been identified as the key links that will drive East Africa trade.
This comes after members after some member states expressed concern that the African trade system has failed to grow beyond the estimated 14–15 per cent over the last three to four years.
However, prospects are now positive that intra-Africa trade will grow 3.9 per cent per annum and reach US$140 billion by 2035.
AfCFTA is a free trade area founded in 2018, with trade which commenced on 1 January 2021. It was created by the African Continental Free Trade Agreement between 54 out of the 55 African Union nations.
A new report by Standard Chartered titled Future of Trade: Africa forecasts a robust intra-regional trade growth for West and East Africa. West Africa’s markets hold great potential for forming value chains downstream in agricultural products such as butter and cocoa beans.
Although East Africa Trade with Southern Africa is expected to grow at a moderate rate, it will still account for approximately two-thirds of total intra-Africa trade by 2035. Within the Southern Africa region, higher integration will drive its share of total intra-Africa exports to a third by 2035.
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East Africa Trade among Most Promising
Kenya’s trade corridors with its East Africa neighbours – Uganda, Tanzania, and Rwanda – are forecast to be some of the highest and fastest-growing through 2035. Beyond East Africa, Egypt is expected to be Kenya’s largest export partner, while South Africa is expected to remain Kenya’s largest source of imports.
“In East Africa, large scale cross-border infrastructure developments such as the Lapsset Corridor Project connecting Ethiopia, Kenya, and South Sudan will drive greater trade in the coming decades,” the report reads in part.
Although currently small, the West Africa-Central Africa (WA-CA) and the East Africa-Central Africa corridors (EA-CA) are expected to experience double digit export growth through to 2035.
The WA-CA corridor will be driven primarily by the robust trade growth expected between Nigeria and Cameroon. The Kenya-Congo Republic1 and Tanzania-DR Congo1 corridors are expected to drive growth in the EA-CA corridor.
Kenya and Congo Republic recently signed 18 agreements to strengthen bilateral ties. Tanzania and the DR Congo are constructing a USD2.2 billion rail network, which upon completion in 2026, will connect the two markets through Burundi, significantly boosting East Africa Trade.
Northern Africa markets will continue to constitute the majority of Egypt’s intra-AfCFTA exports, with Libya and Morocco both forecast to show continuous growth. In East Africa, Kenya is Egypt’s predominant trade partner, and is expected to be one of Egypt’s fastest-growing intra-AfCFTA corridors.
Africa’s corridors to South Asia to be among the fastest growing into 2035
With India as one of the most rapidly growing major economies, corridors between Africa and South Asia are expected to grow the fastest. The East Africa-South Asia corridor is expected to emerge as the fastest-growing major corridor, at 7.1 per cent per annum through to 2035.
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Geographical proximity will remain a key driver of Africa’s trade
Trade between Africa’s sub regions and their long-time trade partners in the geographical vicinity will continue to be substantial. The North Africa-Europe and West Africa-Europe corridors will remain some of Africa’s largest cross-continental corridors.
The Middle East-North Africa and the Middle East-East Africa corridors will also be substantial, with their combined trade volume expected to reach almost USD200 billion by 2035.
East Asia will dominate Africa’s trade with regions further away
Africa’s trade with East Asia is an outlier. Despite not having the advantage of geographical proximity, both Southern Africa’s and West Africa’s trade with East Asia are expected to break into US$100 billion by 2035.
Additionally, East Asia is by far Central Africa’s largest trading partner region. Central Africa’s rich reserves in key minerals used in renewable energy technologies and Mainland China’s global importance in the value chains for these technologies propel this relationship.
