Steve January 14, 2021
figure-of-the-week:-momentum-in-trade-going-into-the-afcfta-era

By Chris Heitzig, Aloysius Uche Ordu

The start of trading under the African Continental Free Trade Area (AfCFTA) commenced just two weeks ago. Many academics, policymakers, and business leaders are hopeful that, if implemented appropriately, the landmark trade agreement could further bolster efforts toward regional integration and spur economic growth across the region more broadly.

The region does enter the agreement with great momentum around trade: Exports have grown by nearly a factor of four since 1995. Notably, while South Africa and Nigeria remain sub-Saharan Africa’s largest exporters, the export landscape beyond these two countries has changed dramatically in recent years (Figure 1).

Figure 1. 10 largest sub-Saharan African exporters (after Nigeria and South Africa) in millions of current US dollars

Figure 1. 10 largest sub-Saharan African exporters (after Nigeria and South Africa) in millions of current US dollars

Source: Authors using data from World Bank. 2020. “World Development Indicators.”

Between 1995 and 2000, Côte d’Ivoire was the continent’s third-largest exporter, averaging more than $4 billion per year. In 2000, Angola surpassed Côte d’Ivoire and has remained in that position ever since. During this same period, the Republic of the Congo and Botswana, boasted some of the region’s fastest-growing exports, joining Angola and Côte d’Ivoire at the top. Ghana’s exports remained strong throughout this period, making it the region’s fourth-largest exporter overall each year between 2012-2018.

The narrative changes slightly when considering exports per capita. Exports per capita also grew substantially from 1995 to 2018, expanding by a factor of 2.5. By and large, the leaders in exports per capita are small nations with no more than a few million inhabitants, including Seychelles, Equatorial Guinea, Mauritius, Botswana, and Gabon. Since 1995, Seychelles has nearly uninterruptedly led the continent—including Nigeria and South Africa—in exports per capita, exporting nearly $20,000 per capita in 2018. South Africa and Namibia were the only two countries to finish in the top 10 of both exports and exports per capita in 2018.

Figure 2. 10 largest exporters per capita (current US dollars) in sub-Saharan Africa, 1995-2018

Figure 2. 10 largest exporters per capita (current US dollars) in sub-Saharan Africa, 1995-2018

Source: Authors using data from World Bank. 2020. “World Development Indicators.”

As Africa begins the AfCFTA era, it will try to harness the momentum it has displayed in trade the last few decades, though bottlenecks around infrastructure and other nontariff barriers still threaten its overall success. For more on perceptions of the AfCFTA among small business owners, consider reading, “Figure of the week: Perceptions of the AfCFTA among small enterprises in Nigeria.” For more on the challenges of implementing the AfCFTA, consult “Mitigating short-term adjustment costs: Preparing for the AfCFTA.”

from Brookings

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