The future of African trade is not with traditional western economies but instead with southern and eastern economies such as Brazil, China and India, the head of Afreximbank, Jean-Louis Ekra, outlined to delegates at the recent Forum Africa held in Montreal, Canada.

“During the last three decades, the share of the ‘south’ economies [Brazil, India, China, Southeast Asia] in Africa’s merchandise exports grew from a level of 17% in 1990 to over 44% in 2010,” he said.

China has also replaced the US as Africa’s single largest trading partner with Brazil being another major growth area, he added. India too is an expanding market for African trade and, in 2010, replaced Germany as Africa’s fourth largest trading partner, accounting for 5% of the continent’s total merchandise trade.

There has already been large investment in African infrastructure by companies from these economies, backed by national governments or export credit agencies, and there is room for further investment in the future, he outlined.

“Africa’s consumers and natural resources, agriculture and infrastructure services sectors could generate a combined annual revenue of US$2.6tn by 2020, if these sectors are able to attract the required capital investments,” said Ekra, quoting a McKinsey & Co report.

One of the most important drivers of growth in Africa will continue to be trade because of the world’s continuing demand for commodities.

“The value of Africa’s merchandise trade grew at an impressive average annual rate of 14% from US$242bn in 1980 to about US$1tn in 2008, and further to an estimated US$1.28tn in 2012, amid a dip in 2009 as a result of the global financial and economic crises,” Ekra pointed out.

This trend is expected to continue and Afreximbank expects the continent’s total merchandise trade to pass US$2tn by 2016. Difficult customs regulations and complicated border crossing procedures have long been a challenge for traders in Africa but, Ekra emphasises, this is changing and trade is rising in response.

Foreign direct investment (FDI) is on the rise as well, increasing from US$9.6bn in 2000 to over US$50bn in 2011. FDI reached its peak between 2007 and 2009.