Homogeneity of products from most African markets has been cited as one of the challenges holding back the growth of intra-Africa trade.
The majority of African producers and exporters deal in similar products reducing the chances of trading between each other. This forces them to import from markets outside Africa.
This was said by the Minister of Trade and Commerce, Francois Kanimba, as he discussed the impediments to Intra-African trade on the second day of the week-long 49th AfDB Annual Meetings.
“Many African countries export similar products. There is need for diversification if we are to trade with each other,” Kanimba said.
The minister also cited the tendency by most African producers to design and produce exports with the developed markets in mind as well as a culture of discouraging emerging traders at border points as yet another challenge.
“History has shown that African products are mostly designed to suit developed markets. African traders are reluctant to produce valuable goods that can be traded amongst ourselves and this has greatly hampered trade,” Kanimba said.
He noted that Vision 2020 has outlined key areas that can contribute to the country’s economic growth projections, adding that the projections were dependent on doing business with other African countries.
Dr Richard Sezibera, the Secretary General of the East African Community said intra-Africa trade in the region has more than doubled in the last decade, from less than 10 per cent to over 25 per cent.
“This has been due to the reduction of trade barriers that has consequently reduced the cost of doing business in the region. Previously it would cost $1,500 to ship a container from Japan to the port of Mombasa and $4,500 to move the same container to Kigali from Mombasa. Much of the cost was due to administrative hurdles. The cost (from Mombasa to Kigali) has since gone down by $1,075,” Dr Sezibera said.
Frederick Agah, the deputy director of the World Trade Organisation said there was need to integrate regions as it would foster cooperation and trust between countries. He called on African regions to emulate countries that have already integrated.
Johnny Smith, the Chief Executive of Walvis Bay Corridor Group pointed out the importance of creating corridors in various regions to boost intra-regional and Intra-African trade.
Source: The New Times
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