Tanzania has made a significant leap in its trade attractiveness, now ranking fourth highest in Africa, according to the Standard Bank Africa Trade Barometer (SB ATB) released yesterday.
This advancement is attributed to the country’s substantial investments in infrastructure and enhanced access to finance, which have energised businesses and facilitated greater engagement in cross-border trade.
The findings from Issue 4 of the SB ATB, released today, highlight the dynamic changes in the trade landscape across ten African nations, reflecting both opportunities and challenges.
“As Africa moves towards greater integration under the African Continental Free Trade Area (AfCFTA), the Standard Bank Africa Trade Barometer offers critical insights into the opportunities and challenges faced by African businesses and stakeholders in facilitating trade,” said Philip Myburgh, group head of trade at Standard Bank Business and Commercial Banking.
While Tanzania celebrates its ascent from eighth to fourth position, Ghana’s trade competitiveness has faltered sharply, dropping from third to seventh. This decline is concerning for a nation that is often seen as one of the most stable and democratic in West Africa.
The report attributes Ghana’s downturn primarily to a deteriorating macroeconomic environment, which has substantially reduced trade confidence. As the economic landscape in Ghana becomes increasingly volatile, businesses face challenges in accessing foreign currency, particularly the US dollar, crucial for imports, particularly for Small and Medium-sized Enterprises (SMEs) that the barometer aims to empower.
The SB ATB assesses seven thematic categories impacting Africa’s trade: trade openness, access to finance, macroeconomic stability, infrastructure, foreign trade, governance and economy, alongside traders’ financial behaviour. This comprehensive analysis positions the SB ATB as a leading trade index, aimed at bridging the information gap surrounding reliable African trade data, which is essential for fostering growth in intra-Africa trade.
In addition to Tanzania's rise, Mozambique climbed from fourth to third place, Nigeria improved from sixth to fifth, and Zambia moved from ninth to eighth. In contrast, both Uganda and Kenya fell slightly, with Uganda slipping from seventh to ninth and Kenya from fifth to sixth.
Notably, South Africa and Namibia retained their spots at the top of the index, ranked first and second respectively, while Angola held steady at tenth.
The report outlines a mixed outlook for the macroeconomic conditions across the covered countries. Despite anticipated real GDP growth of 4.3% by 2025, ongoing economic challenges persist.
Factors such as high inflation rates, projected to reach 9.9% in 2024 due to currency depreciation, remain a pressing issue exacerbated by climate-related events, including severe droughts in Southern Africa and flooding in East Africa. To navigate these multifaceted dynamics, a focus on prudent economic management, diversified growth strategies, and resilience against climate risks will be essential.
The SB ATB serves not just as a scoreboard of trade attractiveness, but as a strategic tool for businesses aiming to foster sustainable trade and economic development across the continent.
“Given our position as Africa’s largest bank, we recognise that reliable trade data is essential for informed decision-making, particularly within the context of a dynamic trade environment,” Myburgh stated, underscoring the report’s importance for businesses, governments, and investors as they strive to capitalise on emerging opportunities in Africa.
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