Abuja: Africa recorded a growth rate of 3.2 per cent in 2024, in spite of the challenging global environment, says Afreximbank Research Report. Dr Yemi Kale, Group Chief Economist, Afreximbank, disclosed this while presenting the 2025 African Trade and Economic Outlook (ATEO) Report at the Afreximbank 32 Annual Meetings (AAM2025) in Abuja on Wednesday.
According to News Agency of Nigeria, the growth rate was still below the pre-pandemic growth rate of five per cent. The performance could be attributed to stronger public investment, high commodity prices, notably of gold, cocoa, and coffee, and the early success of diversification strategies. However, growth on the continent remained uneven, with resource-dependent countries facing greater challenges.
The report showed that Africa's merchandise trade recovered in 2024, rebounding by 13.9 per cent to reach 1.5 trillion dollars. This marks a significant increase from the decline of about 5.4 per cent recorded in 2023. Africa's merchandise imports grew to 769.01 billion dollars in 2024 while exports grew to 758.01 billion dollars, resulting in a merchandise trade balance deficit of 11 billion dollars.
Intra-African trade demonstrated a remarkable upturn in 2024 of 12.4 per cent to reach 220.3 billion dollars, rebounding from a decline of 5.9 per cent in 2023. However, inflation in Africa increased from 18.2 per cent in 2023 to 20.1 per cent in 2024. This positive trend is expected to be sustained, bolstered by the continued implementation of the African Continental Free Trade Area (AfCFTA), which is emerging as a foundation for the continent's trade resilience.
The 2025 report, 'African Trade in a Changing Global Financial Architecture,' finds Africa at a pivotal juncture. As global trade routes and rules evolve, Africa's share of world exports has seen a slight decline, from 3.5 per cent in 2009 to 3.3 per cent in 2024. Intra-African trade accounts for a mere 14.4 per cent of the region's formal trade, underscoring continued dependence on external demand and exposure to commodity shocks.
Fragmentation brings new opportunities, including increased shipping traffic around the Cape, growing investment in Africa by countries of the Persian Gulf and Asia, and heightened demand for Africa's critical minerals, which are enhancing the continent's strategic position. Unlocking this potential requires closing the 100 billion-dollar annual trade-finance gap, which constrains most African small and medium enterprises from participating in regional value chains.
Africa's financial architecture is gradually restructuring and beginning to respond to new economic realities. Afreximbank disbursed 17.5 billion dollars in 2024 and aims to double intra-African trade finance by 2026. The Pan-African Payment and Settlement System (PAPSS) is gaining traction, with over a dozen central banks now linked, reducing transaction costs and reliance on the US dollar and euro.
The report conveys Africa's urgent need to transform global fragmentation into a catalyst for resilient, inclusive growth and value-added trade. African development finance institutions must be strengthened with more capital and fairer global regulation, as well as accelerating AfCFTA implementation, especially around tariff schedules, rules of origin, and national coordination.
The need to expand digital payment infrastructure to reduce currency and logistics bottlenecks is highlighted, along with using Africa's G20 seat to push for reforms in reallocation of special drawing rights, debt restructuring, and global financial rulemaking. Financial sovereignty, digital integration, and coordinated diplomacy must form the foundation for Africa to overcome global disruption and build a more sustainable, shock-resistant, and opportunity-rich trade future.
The 2025 edition of the African Trade Report, published by Afreximbank, examines trade and economic development in Africa and other parts of the world during 2024. It explores how a fragmented global economy, characterised by geopolitical tensions and industrial rivalries, is impacting Africa's trade dynamics amidst its push for industrialisation and deeper intra-African trade integration.