Africa’s public debt soared to $1.8 billion in 2022, marking a significant increase of 183% since 2010, according to a 2023 report by the Economic and Social Council.
The report highlights a concerning financial landscape where, as of September 2023, nine African countries are experiencing debt distress, with an additional 12 at high risk of falling into similar situations.
The escalating public debt is attributed to rising import costs, increasing interest rates, and the amplification of climate risks. These factors are anticipated to elevate the continent’s debt-to-GDP ratio to 63.5% in 2023 and further to 65% by 2024.
In light of these challenges, the report underscores the pivotal role of regional integration in fostering productive and sustainable development across the continent. The successful implementation of the African Continental Free Trade Area (AfCFTA) agreement is deemed essential for Africa to harness the benefits of free markets and trade integration effectively.
Despite the official commencement of trade under the AfCFTA on January 1, 2021, the expected boost in intra-African trade has yet to materialize. The report reveals a decline in intra-African trade’s share of global trade, falling from 14.5% in 2021 to 13.7% in 2022. Additionally, both intra-African exports and imports saw a reduction during the same period, signaling a preference for trading with external partners over regional exchanges.
Merchandise trade remains a dominant force in Africa’s global trade engagement, with imports and exports witnessing significant growth in 2022. Merchandise imports rose by 15.5%, reaching $706 billion, while exports grew by 26.8% to $724.1 billion, culminating in a trade balance surplus of $18.1 billion—a 145% increase over the previous year.
These trends underscore the ongoing preference of African countries to engage more with the global market than with each other, highlighting the need for enhanced regional integration efforts to realize the continent’s full trade potential.
