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Africa's Macroeconomic Challenges: Trade & Regional Growth

Explore Africa's growth outlook, trade opportunities, debt trends, and regional integration initiatives to boost economic prosperity. Learn about the potential impact of the African Continental Free Trade Area (AfCFTA) and efforts in domestic resource mobilization.

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Africa's Macroeconomic Challenges: Trade & Regional Growth

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  1. Macroeconomic Policy questions, Trade and Regional Market Integration:Presentation to the 2nd Committee Dialogue Ms. Vera Songwe, Executive Secretary Economic Commission for Africa

  2. Regional Growth RatesAfrica’s growth is expected to decline slightly to 3.6% in 2018 SOURCE: UNDESA 2018 www.uneca.org

  3. Sub-regional Growth RatesEast Africa is expected to achieve the highest growth SOURCE: UNDESA 2018 www.uneca.org

  4. The savings – Investment gap is widening SOURCE: Calculations based on World Bank 2018 data www.uneca.org

  5. Current account and fiscal balances have mainly been affected by external factors SOURCE: Calculations based on EIU 2018 data www.uneca.org

  6. Total debt, external debt and debt service are on the rise again SOURCE: Based on IMF 2018 www.uneca.org

  7. But the debt story is not the same for all African countries(2015 – 2017 Averages) 30% SOURCE: Based on IMF 2018 www.uneca.org

  8. Tax-GDP has been declining: There is room to mobilise more domestic resources to address fiscal challenges, and to finance SDGs SOURCE: IMF data REO Data www.uneca.org

  9. Opportunities in Trade and Regional Integration:Compared to other regions, Africa currently trades less with itself Intra and extra-group merchandise for selected regions (percentage, average 2012-2016) Source: Based on data from UNCTADStat (http://unctadstat.unctad.org), accessed on 27/08/2018 www.uneca.org

  10. Opportunities in Trade and Regional Integration:Africa trades with itself more on manufactured goods than on primary commodities Intra-African Exports as a share of total exports: primary commodities and manufactured goods (percentage, 2012─2016) Source: Based on data from UNCTADStat www.uneca.org

  11. Africa trades with itself more on Non-Extractive (mostly manufactured goods) than with the Rest of the World Structure of Intra-African exports compared to exports to the Rest of the World www.uneca.org

  12. The importance of the AfCFTA for Africa’s growth, trade and regional integration • ECA has been and will continue to be strongly engaged in the AfCFTA processes. • It is estimated tariff elimination on goods under AfCFTA could increase the share of intra-African trade between 40% to over 50%. • The increase would be much larger if liberalization of trade in services and non-tariff barriers were to be tackled within Africa. www.uneca.org

  13. The importance of the AfCFTA for Africa’s growth, trade and regional integration • In 2015, African countries spent about US$63 billion on food imports, largely from outside the continent. • ECA projects that under AfCFTA, intra-African trade in agricultural products will be between 20% and 30% higher in 2040. www.uneca.org

  14. AfCFTA also offers a platform for continental cooperation and progress in other areas www.uneca.org

  15. ECA is also leveraging AfCFTA momentum for Digital Identification on the continent www.uneca.org

  16. Cooperation for Domestic Resource Mobilization • ECA will partner with OECD on the The Global Forum on Transparency and Exchange of Information for Tax Purposes where: countries commit to tackle tax-related IFFs related through Exchange of Information (EOI) and improved international tax cooperation. • Only 27 African countries are members of the Global Forum • Only 20 have signed the related Yaoundé Declaration www.uneca.org

  17. THANK YOU! www.uneca.org

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