Despite Western perceptions pinpointing Africa as a hopeless continent, different studies and reports emanating from various quarters now seem to be telling a different story. A story of hope, hard work and robust economic growth. Once again, the continent gets another rare accolade in a sector dominated by major economic powerhouses.
A report released this week by Standard Chartered ranking Côte d’Ivoire as the top market that has rapidly improved its trade growth potential over the past decade, will certainly set tongues wagging. Even in places where Afro-pessimists thrive and badmouth the continent’s political leaders for enriching themselves, while the majority of the population lives with less than $1.25 per day.
Kenya, which is consolidating its position as the trading hub of East Africa is ranked three, while Ghana also performs well in the index, placing just outside the top 10.
The Standard Chartered Trade20 Index determines each market’s trade growth potential by analysing changes within the last decade across a wide range of variables.
The study, which examines 66 markets around the world, finds that while existing trade powers like China and India continue to rapidly improve their trade potential, African economies are making particularly strong progress from a relatively low starting point.
Africa’s portion in the world trade is slim, representing only between two to three percent of global trade volume. And intra-Africa trade is also insignificant, accounting for less than 15% of total exports and contrasting sharply with South America (22%) and Western Europe (70%).
However, the growing prominence of developing countries is a salient feature of the shifting global trade landscape, and over the past two decades, the share of these countries in global merchandise exports has increased from around 30% to 50%, the International Centre for Trade and Sustainable Development said in its analysis of 10 March 2016.
The article was published in a Bridges Africa series.
“Although this shift is mainly driven by Asian economies, the contribution of African countries has increased from six percent in 2000 to 9% in 2013. This implies that, while traditional developed countries remain important markets, developing countries also provide enhanced trading opportunities,” the ICTSD added.
The Standard Chartered Trade20 index found that Côte d’Ivoire and Kenya have significantly improved their trade readiness, demonstrating that investments in infrastructure and business environment improvements are paying off.
The study is grouped into three equally-weighted pillars: economic dynamism, trade readiness and export diversity. Côte d’Ivoire and Ghana fared well for economic dynamism, with Côte d’Ivoire enjoying robust Gross Domestic Product and export growth, and Ghana seeing an influx of foreign direct investment.
This is a remarkable feat for Côte d’Ivoire, which is still recovering from more than a decade of armed conflict, and the 2010/2011 election violence that claimed more than 3 000 lives.
Saif Malik, Standard Chartered global banking regional co-head for Africa and Middle East, said: “Home to some of the world’s fastest-growing economies, Africa has the potential to become a much bigger player on the global trade stage.
“Already connected with the trading powers in Asia, particularly China, through the Belt & Road Initiative, and with the launch of the African Continental Free Trade Area, we see numerous growth opportunities for trade and investment in the years ahead.
“Additionally, the growing young, digitally-savvy population and an increasing female workforce will aid in the continent’s economic transformation.”