According to the United Nations Conference on Trade and Development (UNCTAD), intra-African trade rose by 6 percent in 2023, showcasing progress towards the goals of the Africa Continental Free Trade Area (AfCFTA).
Established in 2018 and officially launched in 2021, AfCFTA aims to create a unified market for goods and services, allowing the movement of people to deepen economic integration across the African continent. This initiative connects 1.3 billion individuals across 55 nations with a combined gross domestic product (GDP) of $3.4 trillion.
In its latest Global Trade Update released recently, UNCTAD highlighted that while global trade declined by 3 percent in 2023, trade within African economies defied this trend by increasing by 6 percent during the year.
Despite the overall contraction in global trade, UNCTAD anticipates a rebound in international trade in 2024. The agency mentioned that preliminary data indicates a $1 trillion reduction in global trade in 2023, driven mainly by subdued demand in developed countries and weaker trade within regions such as East Asia and Latin America. However, the services sector continued to grow, demonstrating resilience amid challenging circumstances.
UNCTAD’s report stated: In 2023, global trade saw a 3% contraction, equaling roughly $1 trillion, compared to the record high of $32 trillion in 2022. Despite this decline, the services sector showed resilience with a $500 billion, or 8%, increase from the previous year, while trade in goods experienced a $1.3 trillion, or 5%, decline compared to 2022.
“The fourth quarter of 2023 marked a departure from previous quarters, with both merchandise and services trade stabilizing quarter-over-quarter. Developing countries, especially those in the African, East Asian and South Asian regions, experienced growth in trade during this period.
“While major economies generally saw a decline in merchandise trade throughout 2023, certain exceptions emerged, like the Russian Federation, which exhibited notable volatility in trade statistics. Towards the end of 2023, trade in goods saw growth in several major economies, including China (+5% imports) and India (+5% exports), although it declined for the Russian Federation and the European Union.trade resuming growth, while trade in developed countries remained stable.”
