Africa on its way to overtaking the European and Asian market

Africa on its way to overtaking the European and Asian market

The African Continental Free Trade Area (AfCFTA), represents a huge opportunity for Africa, with its ready market of over 1.4 billion people surpassing that of the European Union and Asia, is expected to make Africa the continent of the future. The road linking Casablanca to the rest of Africa will be essential to the success of the AfCFTA.

Launched in January 2021, the Zleca commits its signatories to eliminating customs duties on 90% of goods, gradually liberalizing trade in services and eliminating other non-tariff barriers. Until October 2022, almost all African countries are signatories or have ratified the agreement.

According to a report based on data from the United Nations Department of Economic and Social Affairs (UNDESA), in terms of population, Africa is already currently double that of Europe with more than 2.2 billion people.

With a young population, all the opportunities are on the side of Africa. The population of the African continent is expected to grow from 18% to 38% between 2023 and 2100, the report claims.

The continent also represents 30% of the world’s mineral reserves, essential for tomorrow’s technologies and renewable energies.

In terms of market share, the European Union has seen its African imports fall by almost a quarter since 2000, unlike China, which multiplied its imports by 5. Asia thus represents nearly 42% of Africa’s exports. and more than 45% of its imports, ahead of Europe.

A promising market

The size of the AfCFTA market has exceeded the EU single market, the United States-Mexico-Canada Agreement (USMCA) and the Southern Common Market (MERCOSUR) combined, says a report by the Mo Ibrahim Foundation.

Unfortunately, intercontinental trade remains the lowest at the level of Africa representing only 12.1% of total world trade, in last place, behind Europe which takes first place with 66.9%, followed by Asia and Oceania with 63.8%, and America with 44.4%, according to 2021 data from the United Nations Conference on Trade and Development (UNCTAD).

“Reliance on external markets leaves the continent highly exposed to crises and shocks in other parts of the world, as seen in the impact of the coronavirus and the ongoing Russian-Ukrainian war,” emphasizes the Foundation.

According to the United Nations Economic Commission for Africa (UNECA), the AfCFTA could boost intra-African trade by around 40%. “By lowering these barriers, it is hoped that intra-regional trade will increase and spur both economic transformation and increase resilience to shocks,” highlights the report which refers in particular to transport, an essential factor for trade and the exchange of goods.

“If the AfCFTA is to be successful, these barriers to trade and business must be removed,” says the document, explaining that with the exception of the rail project linking several African capitals, road transport networks have not progressed since 2012 and the “maritime and postal facilities have also deteriorated”.

The report finds, in this regard, that in the absence of appropriate infrastructure to facilitate movement within the continent, intra-regional trade will continue to be costly and inaccessible, regardless of tariff reductions.

The Afrail Express, the rail network project that is part of the AIHSRN (Continental Rail Network Commissioned for 2063), will connect the capitals of the continent through three key rail corridors.

Morocco is at the center of this transport system since it will be the starting point to several destinations through Casablanca, the economic capital of the country.

Thus the network which should create a direct link between Cape Town in South Africa to Casablanca, then also from Casablanca to Cairo in Egypt, then a link between Cairo and Cape Town. The construction of the road from Cape Town to Casablanca should have different trading points, in Windhoek in Namibia, Luanda in Angola, Lusaka in Zambia, Kinshasa in DRC, Lagos in Nigeria and Dakar in Senegal.

Afrail Express has the potential to carry over 600 million fare-paying passengers and over 500 million parcels via its express courier service each week when fully commissioned.


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