AFRICAS News Desk
Although economies in Africa faced uncertainty in 2022 as economic and global shocks weighed on post-Covid-19 pandemic recovery, intraregional trade and climate finance initiatives are helping to chart a course towards more sustainable development.
Mirroring global trends, growth across the region is expected to slow from 4.7% in 2021 to 3.6% in 2022, according to the IMF’s regional economic outlook for sub-Saharan Africa.
Food security has become a central concern for many African nations, especially as high commodity prices, Russia’s ongoing invasion of Ukraine and climate change-induced natural disasters threaten food supply.
Flooding in West Africa between June and November highlighted the continent’s vulnerability to the impact of climate change, displacing some 1.4m people and damaging more than 500,000 ha of farmland.
Despite these headwinds, 2022 saw an increase in regional cooperation on trade and wider geopolitical involvement, as well as economic diversification plans, and efforts to close the financing gap in support of the energy transition and the preservation of the continent’s substantial natural resources.
Regional cooperation
After the COP27 UN Conference on Climate Change held in Sharm El Sheikh, Egypt in November, Africa is eying an increasingly prominent economic and geopolitical role. The African Union aims to become a permanent member of the G20 to strengthen the continent’s presence in global forums.
The African Continental Free Trade Area (AfCFTA) agreement seeks to revive intra-continental trade, with coffee beans from Rwanda and tea leaves and vehicle batteries from Kenya making their way to Ghana in early December as part of the Guided Trade Initiative pilot programme.
Some 44 of the 54 signatories have ratified the agreement, which is set to create the largest free trade area in the world in terms of number of participating countries.
Intraregional trade currently makes up 15% of the total on the continent, below comparable rates in Europe (67%) and Asia (60%). However, it is anticipated that AfCFTA could boost African exports by 29%, or around $560bn, and lift more than 30m people out of extreme poverty by 2035.
