A new report from Afrexim Bank indicates that Ethiopia has a long way to go to reach its full export potential, suggesting sustained growth levels of 12.2 percent annually could see the country earn nearly USD 20 billion by 2030.
The report highlights that only a handful of African countries utilize more than 60 percent of their export potential, including South Africa, Angola, Morocco, and Algeria, while countries like Egypt and Nigeria lag near the 57 percent mark.
It urges the Ethiopian government to focus on growing coffee, textiles, leather, and manufacturing exports to maximize potential.
The report lauds Ethiopia’s industrial parks initiative as an example of how targeted policy coordination can accelerate entry into global value chains while laying the foundations for domestic value capture.
“By coordinating infrastructure, trade preferences, investment incentives, and skills development, Ethiopia increases backward participation while creating pathways to higher domestic value capture. In an increasingly fragmented global economy, this model highlights both the potential and the limitations of park-based industrialization as a tool for structural transformation,” it reads.
Africa’s export earnings are nearly half a trillion dollars short of potential, suggesting massive untapped opportunity for the private sector and development partners alike. At the sectoral level, the largest export gaps are observed in automotive products, machinery, chemicals, food processing, and communication technology activities.
These sectors exhibit the highest multiplier and spillover effects for employment, productivity growth, and technological upgrading, highlighting the scale of Africa’s latent sovereignty dividend.
Despite geopolitical tensions, particularly US Afreximbank tariffs, African economies have shown significant resilience.
In 2025, the continent’s output expanded by 4.2 percent, up from 3.4 percent in 2024, on the back of robust domestic demand, strong export performance, growth in the services sector, and renewed investment in infrastructure, according to the report.
Still, it cautions that Africa’s economic landscape remains vulnerable, given its overdependence on commodities, which exposes it to high price volatility.
The report notes that inflation peaked at an elevated average of 16.3 percent in 2025 but is projected to moderate significantly to 9.2 percent by 2026 as domestic monetary tightening takes effect. Fiscal and external imbalances remain a concern, though the average public debt is expected to decline to 63.5 percent of GDP by 2026, down from 65.3 percent in 2025.
In 2025, total African trade reached approximately USD 1.4 trillion, with intra-African trade accounting for roughly 18 percent of total trade, supported by the ongoing implementation of the African Continental Free Trade Area (AfCFTA).
The European Union remains the largest overall trading partner, accounting for an estimated 43 percent of exports and 34 percent of imports, while China retains its status as the top bilateral trade partner with trade exceeding USD 295 billion in 2024.
Africa’s trade is projected to keep expanding, with a 10 percent increase in 2026. Similarly, intra-African trade is expected to reach USD 230 billion by 2026, in part due to accelerated implementation of AfCFTA, according to the report.
The Reporter