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Dangote Canvasses For Intra-Africa Trade, Economic Cooperation

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To achieve transformative progress in the continent, Foremost African businessman, Aliko Dangote is already canvassing for a robust intra-Africa trade and economic cooperation. Dangotes’s burning desire for an economic integration conforms to the general assumption that, for Africa to achieve transformative progress, solutions must come from African sources. Intra-Africa trade is the trade in goods and services between or among African countries and the flow of goods and services between Africa and Africans in the Diaspora. Experts have opined that Africa’s development must be underpinned by further regional integration and trade liberalisation. While the rest of the world becomes increasingly fractured and disparate, it is time for Africa to create ways to better integrate its fragmented markets which have long constrained growth and acted as barriers to trades. World Bank statistics put intra-African trade at just 11 per cent of the continent’s total trade between 2007 and 2011. In 2015, intra-African trade was worth just $170 million, according to the same institution’s figures, when the potential stands at trillions of dollars. However, it has been said that to collectively succeed, individual and governments must work towards a regional imperative if Africa’s economies are to be changed in a way that drives sustainable and inclusive growth for the continent as a whole. The belief in many quarters is that regional trading corridors cannot work in isolation but must be scalable to improve connectivity across the African continent. Among other benefits, one of the objectives of intra-trade, is to help the continent’s industries become more competitive by creating economies of scale and weeding out producers that are less productive in the marketplace.

Inter-trade can establish and strengthen product value chains and facilitate the transfer of technology and knowledge via spill over effects and it can spur infrastructure development and attract foreign direct investment. For these reasons, there is no doubt that expanding intra-African trade is a key to accelerating economic growth on the continent. At the fifth annual Financial Times African Summit held recently in Lagos, the president of Dangote Groups, Aliko Dangote, called for conscious efforts at deepening African regional market by African investors and governments to aid rapid growth and development of the continent’s economy. This year, the Financial Times Africa Summit focused on business and investment. After a few difficult years, the economic and business environment is improving in much of the continent.
While the cyclical upturn has been helped by political developments, one of the African continent biggest economies, Nigeria came out of recession. Other economies have benefited from improving commodity prices. And still others never slowed down at all. Though the froth has come off the Africa rising narrative, there is much that is positive, from thriving tech hubs, mega industrial projects, improving infrastructure and a new emphasis on trade and investment.  According to Dangote, the key to Africa’s economic growth and strength is in the development of the regional market, stressing that “regional markets in Africa must work.”Dangote further advised that, Africans must patronise African markets which is why the free trade agreements by African nations is the direction to go to strengthen African markets.
Citing an instance, from his own experience, the president of Dangote group referred to the case of neighbouring Benin Republic where the country continues to import cement from China while his Nigerian factory is only 35 miles away from the border.

Speaking glowingly about the prospect of African economy, Dangote advised that Africans need to trade with themselves, adding that “there is the need for free trade agreement and the availability of huge raw materials to attract investors.” Dangote repeated his central mantra for African growth while urging the reduction of exports of raw materials to other continent but create greater wealth within African economies.
He said, “We need to continue to transform the structure of African economies.” He alluded to his company’s entry into the Ghana sugar market, pointing that “he is further expanding his sugar business to Ghana for the main reason of helping to revitalise its economy. We are going to help Ghana grow its own sugar for the first time.” Dangote also maintained that “Africa cannot develop in isolation, but must take the lead to ensure that any foreign capital or interest in the continent serves its long-term development needs. “ I believe that we will be able to transform Africa by ourselves. Not alone, but we will lead and others will follow,” he said. Other stakeholders, have at different times, said that sub-Saharan African nations must focus more intensely on attracting investments that support business growth, especially those in energy and transport infrastructure.

They believe that the role of governments is the facilitation of trade with regional nations via multilateral agreements, in order to secure viable markets for upcoming African businesses, saying cooperation amongst different countries with different political systems, culture, economic and political objectives is not an easy goal to achieve. “But given that amongst these differences that are a myriad of similarities in the reality faced by our peoples today, at the very least, facilitation trade, simplification of cross-border trade regulations and an implicit understanding that all stand to benefit from cooperation, is key for agreeing on a stable and interdependent growth path throughout Africa. “There is much that African countries need to do to increase intra-regional trade. For instance, the need to reduce dependence on commodities by expanding the services sector, including telecommunications, transport, educational and financial. Africa counties need to increase investments in infrastructure. “And they need to eliminate or significantly reduce non-tariff barriers that are major roadblocks to intra-African trade. The list of non-tariff barriers is as long as it is comprehensive, ranging from prohibitive transaction costs to complex immigration procedures, limited capacity of border officials and costly import and export licensing procedures. For this to happen, it will take much more than political commitments; it will require practical steps on the ground even if they come with some costs,” they stated.

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