Annual trade between Africa and the Caribbean could reach $1.8 billion by 2028: International Trade Centre (ITC)-Afreximbank study

Trade between Africa and the Caribbean could grow to $1.8 billion annually by 2028 if priority is given to increasing value addition, facilitating trade and improving logistics, according to a new study by the International Trade Centre (ITC) and the African Export-Import Bank (Afreximbank) (www.Afreximbank.com).

The value of bilateral trade in goods between the two regions currently stands at $729 million*.

Initial findings released in Nassau, Bahamas as part of the launch of ITC-Afreximbank “Strengthening Trade and Investment in the Africa and Caribbean Region” project during the 31st Annual Meeting of Afreximbank and the third AfriCaribbean Trade and Investment Forum (ACTIF). The research shows that the travel and transport sectors offered the largest potential contribution to this growth, accounting for two-thirds of the potential “trade in services” between the two regions.

The latest findings also show that within the goods segment, the top three sectors are minerals and metals; timber, paper, rubber and plastics; and processed food and animal feed.

The project aims to increase trade and investment in Africa and the Caribbean and to strengthen cooperation between the private sectors in both regions.

Following this launch, Afreximbank and ITC will develop detailed sector profiles in both regions to map these five promising value chains and identify barriers and requirements for growth. The results of this analysis will be presented in a comprehensive report to be published at Fourth ACTIF in 2025.

Prof. Benedict Oramah, President and Chairman of the Board of AfreximbankReacting to the findings, he said: “The report confirms the enormous trade and investment opportunities in Africa and the Caribbean that remain untapped. It is a strong validation of Afreximbank’s strategy for the Caribbean. With a portfolio of projects worth $2.5 billion and an investment portfolio of $1.5 billion, the Bank has demonstrated its commitment to realizing opportunities in both regions. The productive collaboration between Afreximbank and ITC is a testament to this as it aims to bridge the knowledge gap and build capacity among small and medium-sized enterprises that are key to the expansion of trade and investment in Africa and the Caribbean.”

ITC CEO Pamela Coke-Hamilton (http://apo-opa.co/4cHI8mV) said: “Small businesses can be among the first to drive and benefit from increased trade between the two regions, as they are the backbone of the economies of Africa and the Caribbean. There is huge potential for growth if the right sectors are prioritized for development and investment.”

Converting potential into exports

ITC data shows that Africa and the Caribbean – despite their shared history and rich cultural ties – export less than 3%. Export levels were low even before the global impact of COVID-19, conflict and climate change: Over the past decade, the share of bilateral exports has never exceeded 6%.

Where trade between the two regions does occur, it is heavily concentrated in a few key products. For example, more than half of Africa’s exports to the Caribbean are primary minerals, with the leading export being oil ($232 million, 27% of the total).

In terms of Caribbean exports to Africa, fertilizer produced in Trinidad and Tobago – called anhydrous ammonia – accounts for almost half of all exports to Africa ($423 million, 49% of the total).

Solving sales problems

To increase trade between the two regions, two key issues must be addressed: high tariffs (especially on processed goods) and poor logistics. Bilateral tariffs are typically higher than those charged to exporters by other trading partners. Tariffs also increase with the degree of processing, discouraging the conversion of products into value-added goods for export. Reducing tariffs benefits both regions by providing greater variety for consumers at lower costs and allowing regions to specialize in sectors where they are competitive.

In terms of trade logistics, efficiency is significantly lower in Africa and the Caribbean compared to other regions (World Bank LPI) (http://apo-opa.co/4crZDay). Improving the flow of goods and information can enable greater market access and support trade.

Trade agreements are one solution to lowering the costs of trade between the two regions. In a new project, the ITC will analyze how different scenarios of tariff liberalization and harmonization of non-tariff measures can increase trade at the country and product level.

Strengthening partnerships

The project will contribute to the implementation of the Memorandum of Understanding between ITC and Afreximbank and will build on collaboration with the “How to Export with AfCFTA” training programme, South Sudan’s National Export and Investment Strategy, the Pan-African Fashion Alliance and the Pan-African Committee on Private Sector Trade and Investment study.

Notes to the editor

*Current bilateral trade in goods between Africa and the Caribbean is valued at $729 million and excludes tobacco, arms/ammunition and fossil fuels.

Distributed by APO Group on behalf of Afreximbank.

Contact with the media:
Zuzanna Pak
Senior Strategic Communication Specialist
International Trade Center
TO ME: (email protected)
Phone: +41 22 730 0651

Vincent Musumba
Communications and Events Manager (Media Relations)
(email protected)

Follow ITC on:
Twitter: http://apo-opa.co/3xLAzMI
Facebook: http://apo-opa.co/3zux65y
Linkedin: http://apo-opa.co/3W6mW3Y
Instagram: http://apo-opa.co/4cpn3xh
Flickr: http://apo-opa.co/3W6Su9V

Follow us on:
Twitter
Facebook
LinkedIn
Instagram

About the International Trade Center:
The International Trade Centre is a joint agency of the World Trade Organisation (http://apo-opa.co/3WabLY7) and the United Nations (http://apo-opa.co/4cj3fLX). ITC helps small and medium-sized enterprises develop and transform their economies to become more competitive in global markets, thereby contributing to sustainable economic development in the framework of Aid-for-Trade and the United Nations Sustainable Development Goals.

For more information, visit http://apo-opa.co/4cxi4ur.

About Afreximbank:
The African Export-Import Bank (Afreximbank) is a pan-African multilateral financial institution dedicated to financing and promoting intra- and extra-African trade. For 30 years, the Bank has been implementing innovative structures to provide financial solutions that support the transformation of Africa’s trade structure, accelerating industrialization and intra-regional trade, and thereby boosting economic expansion in Africa. As a staunch supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank launched the Pan-African Payments and Settlement System (PAPSS), which was adopted by the African Union (AU) as the payments and settlement platform to support the implementation of the AfCFTA. Working with the AfCFTA Secretariat and the AU, the Bank is establishing a US$10 billion Adjustment Fund to support countries effectively participating in the AfCFTA. At the end of December 2023, Afreximbank’s total assets and guarantees amounted to over USD 37.3 billion, and shareholder funds amounted to USD 6.1 billion. Afreximbank has investment grade ratings from GCR (International Scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). Afreximbank has been transformed into a group entity comprising the Bank, its impact fund subsidiary called Fund for Export Development Africa (FEDA) and its insurance management subsidiary, AfrexInsure (collectively the “Group”). The Bank is headquartered in Cairo, Egypt.

For more information, please visit: www.Afreximbank.com