Of all the continents in the world, Africa is the only continent with poor cross-border and intra trade. While other continents have over 50 per cent trading within their countries, Africa especially West and Central Africa have a very poor intra-trade statistics.
These challenges, it was gathered, were due to bad roads, arduous border checks, harassment and solicitations from security officials for kickbacks from traders.
According to the secretary-general, African Federation of Women Entrepreneurs, Ms. Lucia Quachey, said, “only a few hundred kilometres separate Lagos, Nigeria, from Accra in Ghana but for the thousands of traders who ply this route, the journey through these routes can take a full day. Customs officials and police at roadblocks will make you unload and unpack every little package in order to delay you for hours,” she stated.
However, while trade might be the gateway to development, the statistics in Africa are not too impressive, especially when it comes to one of the biggest opportunities for growth: trade among African countries.
For Instance, in 2014, in Europe, 69 per cent of exports were to other countries in Europe. In Asia, that figure stood at 52 per cent and in North America at 50 per cent. Africa had the lowest level of intra-regional trade, at just 18 per cent because trade among African countries only accounts for about 10 per cent of their total external trade.
Experts said African countries prefer trading with their former colonial rulers rather than with each other. 2021 study by the United Nations (UN), Economic Commission for Africa on regional integration says EU takes biggest share of African trade.
They argued that Senegal’s biggest trading partner is France, while Gambia trades extensively with the UK. Although Senegal surrounds Gambia, trade between the two neighbours is minimal.
Another factor that contributed to the poor trading between the continent is poor connectivity. In Africa, railways and roads often lead towards the ports rather than link countries across the continent to enhance trade among themselves.
LEADERSHIP further gathered that due to hindrances to trade within Africa, exports from Tunisia and Cameroon often find their way to French warehouses before being redirected to each other’s market shelves.
However, worried about this development and to increase intra African trade, various stakeholders have advocates for the dismantling of various tariff and non-tariff barriers, building of infrastructure to boost intra-Africa trade.
Speaking at the 9th United African Shippers’ Council (UASC), recently held in Lagos, tagged ‘African Continental Free Trade Agreement: A veritable platform for African Shippers to Mainstream into global trade’, President Muhammadu Buhari, stated that to increase trade among African countries, government must develop appropriate supporting policies, build requisite infrastructure and ensure an educated work force.
The President, however, stated that the African Continental Free Trade Agreement (AfCFTA), would be a game changer as it will stimulate intra-African trade. He noted that the more ambitious the trade liberalization, the greater the expansion of Nigerian exports to its African partners.
He said, “Specifically, Nigeria’s exports to the rest of African would increase by more than 15 per cent in fishery, textile, wearing apparel, leather, wood and papers, metals, electronics, vehicles and transport equipment and machinery (for industrial sectors) and in meat and poultry, milk and dairy products.
“Others are, rice, other cereals, plant-based fibers and other crops, fruit, vegetables, nuts, vegetable oils, other food products, beverages and tobacco as well as livestock (for agriculture and food sectors).
“Following the AFTCFTA reform, Nigeria’s exports would increase significantly to other African sub-regions, outside West Africa, with most impressive expansions to countries such as Botswana, Cameroon, Egypt, Ethiopia, Kenya, Malawi, Morocco, Mozambique, Namibia, Rwanda, Tanzania, Uganda and Zimbabwe. Also, due to her sheer economic size, Nigeria is among African nations expected to experience the largest absolute expansion in intra – African exports, and the ECOWAS member expected to pppo the largest boost to intra — African exports.”
President Buhari, however, advised African countries on needs to make AfCFTA a reality by creating national institutions to implement the agreement.
“It is an obvious fact that making AFCFTA a reality will require creating national institutions for implementing the Agreement, in addition to institutional coordination mechanisms for execution between public sector, private sector and donors. That is why the Nigerian Government have intensified efforts aimed at identifying new opportunities for diversification and value chain development under the AfCFTA, and complementary actions considered necessary to overcome the existing constraints to intra African trade.
“This we will achieve through cross sectoral approach, considering not just trade, but also closely related areas such as agriculture, industry, macroeconomic management and infrastructure development.”
On his part, the executive secretary, Nigerian Shippers’ Council (NSC), Hon. Emmanuel Jime, said African leaders must embrace tariff liberalisation for intra African trade to thrive.
According to him, trading within African countries is presently at a paltry 11 per cent while Africa’s trade to global trade is at ridiculous three per cent.
He, however, advised that re-orientation and re-organization of intra-Africa trade should start from West and Central Africa sub-region, saying should the region get it right, it will be easier for other sub-region in the African continent to trade among themselves.
“I believe that AfCFTA is a very important tool to boost the African economy by increasing intra-African trade. When adequate measures are put in place to reduce tariff and non-tariff barriers that hamper trading between Countries in the continent, then we will be on our way to achieving greater economic development for the continent.
“We all know that it is not an easy task, because a lot of things have been left undone in the past, but We can start now with great commitment and determination, we can achieve the Africa we all desire,” Jime said.
The Shippers Council’s boss, however, stated that if potentials inherent in intra-African trade are effectively harnessed, the African economy would expand by 52.3 per cent
“The United nations Commission for Africa estimated that AFCFTA would expand the size of Africa’s economy to US$29 Trillion by 2050 and increase intra-African trade to 52.3 per cent from the current 11 per cent. Share of Africa’s trade to global trade is expected to double from current three per cent to six per cent with the implementation of the agreement. The re-orientation and re-organisation of intra-African trade should start from our subregion, when we get it right in West and Central Africa, it would be much easier to connect and freely trade with other regions of the continent.”
“We need to create smooth integration of our transport infrastructures and trade policies as well as the required awareness among the economic operators in the sub-region. There is need to sensitise our various governments to fast track the dismantling of various tariff and non-tariff barriers that are hindering international trade. We should always look at the holistic impact which tariff liberalization would have on our economy rather than just considering the immediate shortfall.”
The secretary general, Abuja Memorandum of Understanding (MoU), Capt. Sunday Umoren, noted that AfCFTA, might suffer setbacks without the active collaboration of private sectors and development partners.
He added that there was need not to totally ignore the role of carriers, the vessel owners and the vessel itself on their part in delivering on AFCFTA.
“Shipping is the bedrock of globalisation. It helps in ensuring that the benefit of trade and commerce are more evenly spread across countries.
“All African industrial policy makers should be bold in developing and implementing extensive range of reforms and trade facilitation measures needed to rely the substantial rewards and dividends that the agreement offers,” he said.
Umoren urged that nothing should stop the region from having a ship owning capacity to eliminate the burden and impact of high freight rate of foreign ships.
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