While global trade has shown signs of recovery in the first half of 2024, the performance of Sub-Saharan African countries has remained disappointing compared to other regions.
According to the latest UNCTAD Global Trade Update, trade growth in Sub-Saharan Africa lagged behind the rest of the world in the first quarter of 2024. Exports from the region grew by only about 0.5% quarter-over-quarter, well below the 1% increase seen globally for goods trade.
“Sub-Saharan Africa has not yet been able to fully capitalize on the upturn in global demand,” said an UNCTAD economist. “Persistent challenges like infrastructure deficits, limited productive capacity, and trade frictions continue to constrain the region’s trade performance.”
One bright spot has been increased trade within the African continent, bolstered by the implementation of the African Continental Free Trade Area (AfCFTA). Intra-African trade grew at a healthy pace of over 2% in Q1 2024. However, this dynamic has not been sufficient to offset the region’s lackluster global trade figures.
Looking ahead, the outlook for Sub-Saharan African trade in 2024 remains cautious. The report notes that while global GDP growth is projected around 3% for the year, the economic growth forecast for Sub-Saharan Africa is only about half that level. This divergence is likely to keep a lid on the region’s trade expansion.
“Geopolitical tensions, rising shipping costs, and emerging industrial policies around the world pose broader risks to global trade that could disproportionately impact Sub-Saharan Africa given its relatively weak position in global value chains,” the UNCTAD economist added.
To boost trade, the report recommends that policymakers in Sub-Saharan Africa focus on improving trade-enabling infrastructure, supporting diversification into higher value-added products, and deepening regional economic integration efforts like the AfCFTA. Addressing these structural challenges will be crucial for the region to capitalize on the expected recovery in global demand.
