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Apr 24, 2012

How to Increase Trade Within Africa? Differing Views Agree That Transportation Issues Hamper Agricultural Development

Railroad connecting Zambia and
Zimbabwe at Victoria Falls.
  Zambia has two major railroads that
connect to provide an outlet to
the port of Dar es Salaam
Photo: Vberger/Wikipedia

As a 23 April 2012 article by IBSA News points out, trade experts at the World Trade Organization (WTO) and at the think-tank South Centre, have differing opinions on how to increase intra-continental trade in Africa.  Both agree that the lack of efficient transportation networks is hampering agricultural development.

According to Valentine Rugwabiza, deputy director general of the WTO, Africa, with its high dependence on trade with the outside world, is highly vulnerable to external shocks.
  • "In 2008, Africa imported cereals for US$15 billion with only 5% of this coming from the continent.
  • Africa’s share in world trade is also very small – less than three percent in 2011 – it is growing very rapidly, particularly with emerging economies; trade amongst African countries is stagnant.
  • Intra-continental trade is stagnant due to lack of investment in infrastructure (roads, railways) and non-tariff barriers (import licenses, government permits)
  • It takes 18 days to export products from Latin America and the Caribbean, 33 days to do so from Africa.
  • It is also more expensive to ship a container from Africa than from any other part of the developing world.  A shipping container from South-east Asia costs US$900 but US$2000 from Africa."
According to Aileen Kwa, trade policy officer at the South Centre, an inter-governmental think tank for developing countries based in Geneva, Switzerland:

  • "In absolute terms, intra-African trade is low.  However, in terms of non-oil exports Africa’s internal trade is almost on par with its exports to the EU. Furthermore, the trade growth rate within Africa is the second highest after China and before the United States and the EU. 
  • Africa's over-dependence on food imports is due to their loss of productive capacities. ... In the short run countries must be able to import food quickly and as cheaply as possible to meet their immediate. However, over the long term [they must be able to] produce their own food without relying on imports from developed countries that have an extremely unfair competitive advantage due to the latter’s massive government subsidies.
  • Relying on imports undercuts domestic producers and undermines their future capacity to produce. Therefore, countries may need to use tariffs and other trade policy tools to stop some of the imports, even from their neighbors, at least for some time.
  • First countries have to increase their productive capacities and then trade will follow. The WTO always thinks about increasing trade, but the main question for Africa is how to increase its productive capacities. Then trade will naturally follow.
  • In some parts of Africa, intra-regional trade is larger than in others. The total exports of the East African Community (EAC) to sub-Saharan Africa already surpassed their total exports to the EU in 2000. Other countries like Zambia and Senegal also export more to Africa than to Europe."
For more see: Agazzi, Isolda. "Intra-African Trade or Global Integration: A Chicken-and-Egg Dilemma?" IBSA News, 23 April 2012.

About Margaret

CEO and Curator (The Food Museum) | Managing Director and Chief Editor (GR2 Global LLC) | Educator (UCLA PhD) | Researching and writing on global food issues, nutrition and health, sustainability, history (preservation), conservation (natural resources), and design.
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