Africa is gearing up for a new era of trade and investment, with a focus on collaboration, creativity, and the digital economy. Representatives from three World Trade Center® (WTC®) locations including WTC Cairo, WTC Addis Ababa, and WTC Abuja, highlight the trade prospects and challenges facing Egypt, Ethiopia, and Nigeria in 2023.
Egypt: Focusing on Collaboration and Trade Services
Mr. Farag El Mahrouky, Head of Marketing and Customer Service Department at WTC Cairo points out that Egypt is looking to focus on collaboration and communications in 2023, with a keen emphasis on improving trade services.
At the end of 2022, Egypt successfully concluded its first trade agreement under the African Continental Free Trade Agreement (AfCFTA), thanks to a collective effort by stakeholders to eliminate export barriers. This landmark deal facilitated the export of food products from Egypt to Ghana and laid the foundation for future trade exchange activities in the region.
While the country enjoys a welcoming business environment and growth opportunities and is shifting towards sustainable development in key sectors such as energy, IT, and tourism, there is a recognition that these efforts will be more successful with a concerted collaborative effort from both the government and private sector. To drive future success, it is essential to promote more B2B trade and investment meetings and to increase awareness among manufacturers and exporters about the significance of the agreement and the benefits they can reap by exporting under it.
The biggest challenge facing Egypt in the year ahead is inflation, price hikes, and job creation, but with the right focus and collaboration, communications, and enhancing international trade services, there is reason for optimism.
Ethiopia: Sustained Peace Deal, Rebuilding and Bi-and Multilateral Relationships
As a signatory of the AfCFTA, Mr. Rateneh Fassil, CEO and Managing Director of WTC Addis Ababa, sees the continued growth of regional and continental trade integration as a major opportunity for growth and recovery, especially in the areas of infrastructure, education, and health.
He points out that the story of abundant opportunities for growth, prosperity, and decreased trade deficit is not obvious when looking at the current number of intra-African trade dwindling at only 14%. However, the comparative advantages of the various economies across the borderless AfCFTA market bodes well for this story to be developed.
The opening up of the Ethiopian economy, especially in the finance and banking, retail, telecom, and IT sectors present some of the biggest opportunities for growth and employment. The government’s self-reliance scheme and the completion of major power supply infrastructures will also provide Ethiopia with a competitive edge and increased export ability.
Despite these opportunities, Ethiopia still faces challenges such as changing regulatory environments and foreign exchange shortages that hinder access to necessary inputs. Global fuel prices also contribute to growing inflation and diminishing purchasing power.
Looking ahead, Ethiopia sees sustained peace and the implementation of AfCFTA as key factors for the growth of trade and investment in Africa. The African Union’s recent summit “The Year of AfCFTA: Acceleration of the African Continental Free Trade Area Implementation” held in Addis Ababa, stressed the impetus of strengthening integration and cooperation to ensure that each member state lives up to their commitment in making the AfCFTA a success.
The country also sees the increasing focus from countries like China and the U.S. as a positive sign for the future. China, which has always had laser sharp focus on Africa and related investments, is moving with a more cautious investment and financing strategy, while the U.S. is also clearly reorienting and realising the need of similar if not increased focus as the recent “U.S.-Africa Leaders Summit” and the related events around it have clearly shown.
Nigeria: Balancing Creativity, Digital Trade, and Maintaining Relationships
According to Ms. Wuraola Onigbogi, Trade Services Manager at WTC Abuja, Nigeria is taking a holistic approach to 2023, recognising the importance of creativity, digital trade, and maintaining relationships with clients.
The country’s revised 2023-2027 trade policy places a strong emphasis on e-commerce and digital payments, and Nigeria is eager to take advantage of the increased access to cheaper goods and services offered by the AfCFTA.
As an example, Onigbogi believes that the real innovation in Africa lies within human commerce and the shift to mobile money transactions. Nigeria has seen a surge in mobile money transactions year-over-year. The volume of mobile transactions increased by 237% to 108 million in January 2023 from 32 million in January 2022. This growth is being driven by a young and tech-savvy population, opening up new possibilities for services like fast affordable transport and mobile food deliveries.
Nigeria is also poised to be a hub of international trade for manufactured and processed goods, with a focus on agro-processing and agriculture. The Federal Government of Nigeria, in particular, is working to address challenges in the sector with initiatives such as the “Zero Reject Initiative.”
In addition, the mining sector, with its untapped mineral resources like gold, iron-ore, and titanium, remains an important part of Africa’s future.
However, there are also challenges ahead, with inflation and decreasing oil revenue projected for the year.
Where to Next for Africa Trade and Investment
Robin van Puyenbroeck, Executive Director-Business Development at the World Trade Centers Association® (WTCA®) – the global network comprised of more than 300 WTC locations in nearly 100 countries of which WTC Cairo, WTC Addis Ababa and WTC Abuja are members – says it is possible to make a positive change in Africa. With the AfCFTA, a trade infrastructure is being developed on the continent that provides the platform for innovation and investment to make the change happen.
The AfCFTA has taken off and created a critical framework to facilitate more intra-African trade. Paired with greater access to finance as well as active business networks we will see more African countries trade with each other and create growth opportunities for their respective economies.
The WTCA’s upcoming 2023 General Assembly in April, to be hosted by WTC Accra, will focus on the theme of “Towards African Economic Integration and Enhanced Global Presence,” bringing together member WTC locations and their business networks and featuring keynotes and panel discussions on topics relating to global trade to/from Africa, and uncovering the business opportunities available across the continent. This will be the first time the General Assembly is being held in the West African sub-region, and the WTCA’s first in-person global event since the beginning of the COVID-19 pandemic.
As we move further into 2023, there is a recognition of the importance of collaboration, creativity, and taking advantage of these trade and investment opportunities. It is an exciting time for Africa’s trade and investment prospects, and we look forward to seeing the growth and prosperity that can be achieved through these efforts.