During this year's World Economic Forum, Nigeria's President Goodluck Jonathan said, "It is easier to move goods from African countries to Europe and the rest of the world than to trade between one African country and another."
With the global economic crisis and the African continent on the rise, trade at the regional level must be taken seriously as it has the potential to provide economic growth and jobs.
There are barriers to increasing trade within Africa. Many countries are still plagued by problems resulting from poor infrastructure. In addition, trade barriers vary from country to country, creating a complex minefield of dos and don'ts for potential business partnerships. There is also an underlying consensus across the continent amongst the public and private sector, that Africa should always look outward and consider investing in, and attracting investment from, abroad.
But these barriers and attitudes are changing as many African leaders are coming to view their neighbors and the continent's vastness and variety as possible opportunities for creating economic growth, business and boosting employment.
"Africa investing in Africa" will become an important slogan for Nigeria, South Africa and Angola, and will encourage more African professionals from the African diaspora to return to the continent to seek opportunity and contribute their skills, explains Ngozi Okonjo-Iweala, Nigeria's Finance Minister and coordinating Minister for the Economy.
She adds, "It will take years to provide decent transport links across the continent, and cultural, religious and political hurdles to intra-continental collaboration will not be surmounted overnight. Nonetheless, it is entirely possible - even probable - that Africa, blessed with abundant natural resources and a young, energetic and increasingly educated population, will rival Asia as the continent of the 21st century."
According to the African Union's 2012 Action Plan for Boosting Intra-African Trade, intra-African trade stands at around 10 percent, compared to the 60 percent, 40 percent, 30 percent intra-regional trade that has been achieved in Europe, North America and ASEAN respectively. Even if allowances are made for Africa's unrecorded and informal cross-border trade, the total level of intra-African trade is not likely to be more than 20 percent, which is still lower than similar trade in other major regions of the world.
To ensure an increase in intra-African trade, the report suggests mainstreaming intra-African trade in national trade and development strategies; enhancing the roles of the organized private sector, the informal private sector and women in trade policy formulation; boosting intra-African trade in food products; undertaking commitments to liberalize trade-related service sectors; committing to harmonizing rules of origin and trade regimes; and finally promoting trade with slogans like "Buy in Africa" and "Made in Africa."
Skeptics point out that protection tariffs and a myriad of non-tariff barriers still stifle continental transactions. However, there has been a drive in recent years to create a continental free trade area (CFTA) based on free trade initiatives being pursued by regional economic communities.
One thing is clear from the tone set at the World Economic Forum (WEF) this year: African leaders who talk about potential need to produce concrete results. As Okonjo-Iweala rightly highlighted, "Africa will continue to be innovative in using existing technologies, such as mobile phones, in new ways to spur increased productivity, and to provide a better delivery of basic health and education services."
Though intra-African trade remains small, there have been some positive signs, such as the stronger growth in manufactured and semi-manufactured goods.
(The writer is Communications Manager of EMRC – an internationally renowned organization providing a platform for Africa's private and public sector to come together and discuss partnership opportunities - www.emrc.be) |