The value of intra-Africa trade fell to $190.9 billion in 2023, reflecting ongoing challenges faced by African economies in facilitating trade among themselves under the continental Common Market, primarily due to persistent tariff and non-tariff barriers. Consequently, the share of intra-African trade in total commerce declined slightly to 14.4 percent, down from 14.7 percent in 2022, as outlined in a recent report.
In sharp contrast, intra-Africa trade experienced substantial growth of 20.6 percent in 2022, according to the data provided in the Africa in Figures 2024 report.
Southern Africa recorded the largest share of intra-African trade at 41.1 percent, followed by West Africa at 23.4 percent, East Africa at 16.4 percent, North Africa at 12.3 percent, and Central Africa at 6.8 percent.
South Africa maintained its status as the leading intra-African trading nation, with trade valued at $39.2 billion in 2023, a slight decrease from $39.9 billion the previous year. Côte d’Ivoire ranked second in intra-African trade with contributions exceeding $9 billion, accounting for approximately five percent of the continent’s total. Mali followed as the third-largest trading nation, with trade increasing by 18.1 percent to $8.9 billion. Egypt completed the list with its trade growing by 11.4 percent to $8.3 billion.
Notable contributors to intra-African trade also included Nigeria, the Democratic Republic of Congo, Zimbabwe, Zambia, Namibia, and Uganda, which collectively represented 22.4 percent of the intra-African trade total.
The report highlights that major exporter nations in Africa are facing significant hurdles due to a challenging global landscape marked by geopolitical tensions, diminished global demand, and slow economic growth. Following a remarkable 20.5 percent increase to $1.4 trillion in merchandise trade in 2022, Africa’s overall trade contracted by 4.6 percent to $1.3 trillion by the end of 2023. This contraction is partly attributed to global events such as the prolonged war in Ukraine and rising conflicts in the Middle East, which have created policy uncertainty and restrictive interest rates, impacting both investment and trade.
Africa’s merchandise exports fell by eight percent to $695.2 billion in 2023 from $705.2 billion in 2022, while merchandise imports also decreased by 1.1 percent to $702.7 billion from a growth rate of 17.1 percent in the previous year. Despite the continent’s trade agreement, evidence suggests that African nations still engage in more trade with the rest of the world than with one another, emphasizing the need for improved integration efforts.
In June 2024, trade experts convened in Douala, Cameroon, to assess the progress of the AfCFTA framework, which continues to face challenges from ongoing tariff and non-tariff barriers more than three years after its implementation.
Foreign Direct Investment (FDI) inflows into Africa decreased by 3.5 percent to $52.6 billion in 2023, down from $54.5 billion in 2022, largely due to reduced investments in South Africa and Egypt, two of the continent’s key FDI destinations. Tight financial conditions have strained project financing—essential for developing nations—while challenges in Europe, a major source of FDI, have significantly impacted investment levels.
North and West Africa emerged as top regions for FDI, attracting $13 billion in 2023, despite a 12 percent decline in North Africa and a one percent decrease in West Africa compared to their 2022 performance. In North Africa, Egypt and Algeria led with FDI inflows of $9.8 billion and $1.2 billion, respectively, while Côte d’Ivoire, Ghana, Nigeria, and Senegal were key contributors in West Africa.
East Africa trailed with FDI inflows totaling $11.2 billion in 2023, slightly reduced from $11.5 billion the previous year. Ethiopia, which remains a notable investment hub due to its robust growth and stability, attracted $3.3 billion in FDI, despite a minor decline. Recent reforms aimed at opening restricted sectors to foreign investment signal potential for increased FDI moving forward. Uganda, with $1.5 billion in FDI, is also emerging as a growing investment destination, buoyed by reforms that enhance its business environment and regional trade dynamics.
