Africa’s total exports will reach $952 billion by 2035, Standard Chartered said in a new report that forecast that the continent’s new free trade area has the potential to increase this figure even further.     

The bank's nearly $1 trillion projection for the region's exports growth would be achieved by an annual expansion rate of 3% from now until 2035, it said in its Future of Trade: Africa report released on Wednesday.    

The report cited the African Continental Free Trade Area (AfCFTA) as key to optimising intra-African trade, saying it could boost the forecast total amount by a further 29 per cent.      

"The disruptions to Africa’s supply chains over the last few years have amplified the urgency to implement the AfCFTA," Sunil Kaushal, Regional CEO, Standard Chartered Africa Middle East, said.    

"With the right regulations, collaboration, and governance, this opportunity can be made a reality."      

The report said AfCFTA is not the first attempt made by Africa’s markets to promote greater cohesion, but the existing agreements often have overlapping or contradicting objectives – creating a “spaghetti bowl effect” - a tangled web of trade alliances. 

African countries began officially trading under the new free trade area at the start of 2021, though the bloc's full implementation will likely take years.

Intra-Africa trade is expected to reach $140 billion by 2035, equating to 15% of Africa’s total exports, the report released at the annual International Monetary Fund and World Bank meetings taking place in Marrakech, Morocco this week, said.

Some of the reports highlights include that Africa’s trade corridors with some of the world’s most dynamic regions will grow faster than the global average of 4.3%.     

The East Africa-South Asia corridor is expected to emerge as the fastest-growing major hub, at 7.1% per annum through to 2035.     

The Middle East-North Africa and the Middle East-East Africa corridors will also be substantial, with their combined trade volume expected to reach almost $200 billion by 2035.    

The report notes that in a survey of over 100 of Africa’s business leaders, 63% polled said complex and uncertain trade rules are one of the top challenges of intra-African trade, while 53% cited poor transportation infrastructure as a key barrier. 

Around 90% of respondents said that they believe the AfCFTA can address most of the issues that limit trade on the continent.

(Editing by Seban Scaria seban.scaria@lseg.com)