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African Countries Could Unlock Billions in Local and Global Trade: An Analysis
Author Name
1/1/2035
Africa's share of global trade remains disproportionately small, hovering around 2%-3%. Countries on the continent trade more with the rest of the world than they do among themselves. To boost growth and reduce poverty, Africa needs to improve its share of trade.
Aid for Trade is a development initiative aimed at removing barriers to trade for developing countries. International trade and development economics professor Bedassa Tadesse, who recently co-authored a paper on Aid for Trade, provides insights into how this initiative is addressing Africa's trade challenges.
Africa's State of Trade
Despite its immense resources and untapped potential, Africa's share of global trade remains small. It is estimated that Africa could annually generate an additional $21.9 billion from exports. This limitation hampers the continent's economic growth and its ability to lift millions out of poverty. Intra-African trade is also low, constituting only about 16% of the continent's total trade volume, compared to 68% in Europe and 59% in Asia.
These statistics have serious implications. Enhancing Africa's trade within the region and globally could drive development, create jobs, and reduce poverty.
However, several challenges hinder Africa's trade potential. The continent faces infrastructural deficiencies, cumbersome trade regulations, and inadequate logistical support. These barriers increase business costs and deter trade within the continent and with the rest of the world.
Aid for Trade seeks to address these issues by providing the necessary support to enhance trade capacity in developing countries. By improving infrastructure, streamlining trade regulations, and bolstering logistical networks, Aid for Trade aims to unlock Africa's trade potential and foster economic growth.
In summary, while Africa's trade challenges are significant, initiatives like Aid for Trade offer hope. By addressing infrastructural and regulatory barriers, Africa can increase its share of global trade, stimulate economic development, and improve the livelihoods of millions.
