<\/p>\n
The report released on Friday, Integrating Africa: From Threads to Hubs, argues that African economies have become increasingly open to trade but have not experienced the industrialisation and structural transformation recorded in East Asia.<\/p>\n
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While Sub-Saharan Africa’s trade-to-gross domestic product ratio stands at about 55% to 60%, comparable to East Asia, income levels remain significantly lower because exports continue to be dominated by raw commodities rather than manufactured products.<\/p>\n
<\/p>\n
According to the study, the continent’s challenge is not the volume of trade, but the composition of exports and trading partners. More than half of Sub-Saharan Africa’s exports to the rest of the world consist of primary commodities such as fuels, minerals and agricultural products. These sectors generate limited value addition, create fewer linkages with domestic industries and remain vulnerable to commodity price swings.<\/p>\n
<\/p>\n
By contrast, trade within Africa is more diversified and manufacturing-focused. Intra-African trade includes higher shares of processed foods, textiles, machinery, transport equipment and other manufactured goods that offer greater potential for job creation, innovation and industrial development.<\/p>\n
<\/p>\n
Despite that advantage, intra-African trade accounts for only 15% to 17% of the continent’s total exports. The report says low levels of regional trade are preventing African countries from building regional value chains that could support industrialisation, technology transfer and economic diversification.<\/p>\n
<\/p>\n
The report warns that regional integration has become more urgent as global trade conditions grow increasingly uncertain. Rising protectionism, export controls, industrial policy interventions and supply chain disruptions are reshaping international commerce. At the same time, many African economies remain heavily dependent on demand from China, the European Union and the United States.<\/p>\n
<\/p>\n
The report also points to opportunities linked to the global green transition. Africa holds more than 50% of global cobalt reserves and about 40% of global manganese reserves, while also possessing significant lithium, graphite and rare earth mineral deposits. However, the authors caution that African countries risk repeating a long-standing pattern of exporting raw materials unless stronger regional integration supports processing and manufacturing industries linked to batteries, electric vehicles and renewable energy technologies.<\/p>\n
<\/p>\n
A key finding is that tariffs are no longer the main barrier to regional trade. About 60% of Africa’s trade costs stem from domestic factors such as customs inefficiencies, regulatory barriers, weak logistics networks and poor coordination between neighbouring countries. The report argues that improving interoperability across customs, transport, digital and regulatory systems is now more important than tariff reductions alone.<\/p>\n
<\/p>\n
The report identifies the African Continental Free Trade Area as the continent’s best opportunity to drive deeper integration, but says success will require stronger implementation, more binding commitments and greater investment in infrastructure, energy and digital connectivity.<\/p>\n
<\/p>\n
–AU\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":40837,"template":"","meta":{"_acf_changed":false,"_links_to":"","_links_to_target":""},"news-type":[44],"class_list":["post-44034","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"Africa's economic transformation will depend on deeper regional integration, with fragmented markets and weak implementation of trade agreements continuing to limit the continent's ability to convert trade into higher incomes, according to a new report by the African Union, World Bank and partners.","published_date":"","news_description":"Africa's economic transformation will depend on deeper regional integration, with fragmented markets and weak implementation of trade agreements continuing to limit the continent's ability to convert trade into higher incomes, according to a new report by the African Union, World Bank and partners.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/44034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":2,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/44034\/revisions"}],"predecessor-version":[{"id":44044,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/44034\/revisions\/44044"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/40837"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=44034"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=44034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}