In a report released this week on trade in Africa, Moody’s identifies barriers that can limit the growth potential of the Continental Free Trade Area (CFTA).
“Non-tariff barriers, such as corruption, ineffective customs documentation and broader procedural approaches hinder exports and trade in Africa. Of the 24 African countries we evaluate, 16 have low or very low scores for institutional strength, “she says.
In the same way, “infrastructures are insufficient despite major investments”. Thus, Moody’s notes that countries like South Africa and Kenya will benefit the most from further integration because of their industrial output and the quality of infrastructure.
However, the CFTA “could boost intra-regional trade, which remains much lower than in developing Asian countries,” the agency notes.
With a rate of 15%, intra-African trade “could help reduce growth volatility and develop local economies in the region,” which, according to the agency, “would stimulate demand and investment in the commercial sectors “.
