More than political will needed to boost intra-Africa trade

Intra-Africa trade has continuously been touted as one of the ways in which the continent can build itself from within and fight poverty.

At the recent World Economic Forum Africa in Durban, newly appointed Finance minister, Malusi Gigaba also reiterated the need to have African countries increase trade among themselves.

“We need to increase intra-African trade, so we don’t rely on what happens in the environment outside but we are able to channel and redistribute resources amongst ourselves and ensure that we generate revenue out of trading with one another,” says Gigaba.

But figures for how much African countries trade between themselves has been quoted by many as being around 12%. This figure has not changed much over the past years.

Africa’s biggest economies, South Africa, Nigeria and Egypt do not have another African country as their top three trading partner.

China remains the number one trading partner for most African countries. Africa continues to absorb products from China, this despite a decline in number of exports from Africa to China.

Gigaba says the reason intra-Africa trade is not growing is because of a lack of political will. “There needs to be a political will in African countries to trade with one another, I always have a sense that it doesn’t exist,” says Gigaba.

But according to the International Centre for Trade and Sustainable Development, African countries need more than political will to increase levels of political will. It is just one of the many obstacles that must be overcome if intra-Africa trade is to flourish.

Cross border trade regulations, slow and costly custom procedures, economic diversification, conflict, infrastructure, border issues and language barriers and currency differences are other issues that must be addressed.

Anabel Gonzalez from the World Bank says dealing with barriers like regional cross border regulations will help not only the big business but also small local business and therefore profound positive effects for the poor.

She says tackling the obstacles will also help Africa attain Agenda 2030 objectives set by the African Union to eradicate poverty.

“Greater intra-African trade of goods and services would support more employment-intensive activity than exports from extractive industries,” says Gonzalez.

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– By SABC