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Trade among African countries is alive and growing, expanding to about 16 per cent in 2014 from 10 per cent in 2000, according to recent data from economists at the African Development Bank (AfDB).
Despite this modest improvement, the volume of intra-Africa trade is a paltry $2 trillion when juxtaposed alongside trade between Africa and the rest of the world, which stands at a hefty $77 trillion.
The reasons for this trade disequilibrium are obvious. Africa is largely disconnected from itself because of its poor infrastructure, restrictive immigration policies, corruption, failure to formalise informal trade, and unclear customs and immigration rules.
Fresh facts emerging, however, suggest a slightly improving scenario. Data for 2003/14 shows that intra-African finance is a significant source of foreign investment in low-and-middle-income countries such as Burundi (79 per cent), Namibia (42 per cent), Rwanda (62 per cent), South Sudan (64 per cent) and Uganda (45 per cent).
Intra-Africa tourism barely exists, but West Africa now accounts for 40 per cent of the total African, Caribbean and Pacific trade with the European Union.
The 15-member nations of the Southern African Development Community (SADC) account for about 45 per cent of Africa’s trade with the rest of the world.
In East Africa, Kenya’s top 10 export markets are Uganda, Tanzania, Netherlands, US, United Kingdom, Pakistan, DR Congo, UAE, South Sudan and Egypt.
The five African countries here account for over 30 per cent of Kenya’s total exports. Kenya’s tea makers are, however, yet to make a serious push into West Africa’s combined market of over 300 million people.
To reverse this scenario, national and regional policy frameworks need to be strengthened and harmonised. This is a job for governments, companies and citizens alike.
In my opinion, what is required to make intra-Africa trade a reality is a deliberate action by private sector players that seek to ensure these bi-lateral agreements do not remain documents collecting dust in our embassies government offices.
The Biennial Kenya Trade Expo Ghana has taken the initiative to fast-track the benefits of these agreements by giving businessmen on both sides of the Rift Valley a platform to explore opportunities in each country.
A recent visit to Kenya by Ghana’s Business Development minister, Ibrahim Mohammed Awal, has reinvigorated relations between Kenya and Ghana, ensuring that Ghana-Kenya trade opportunities are fully exploited with a view to delivering tangible socio-economic benefits.
The visit was climaxed by a panel discussion on opportunities in Ghana at the Capital Club East Africa. It served as a platform for the minister to showcase and pitch Ghana’s trade attractions to discerning members of Nairobi’s business community.
“Ghana is ripe and open for business with Kenya,” Awal said.
The Ghanaian authorities continue to facilitate ways to ensure that private sector players and investors experience continued ease of doing business.
These initiatives include industrialisation and job creation through building one factory in every district. This is a prime opportunity for Kenyan manufacturers.
There are also policies in place and bodies such as the Free Zones, which are meant to enable manufacturers from outside set-up profitable ventures in Ghana, with incentives such as tax holidays and specialised land and work permit allocations.
Reduction of nuisance taxes that weigh on private sector in Ghana has effectively begun and the business fraternity is starting to feel the effect.
The forthcoming Kenya Trade Expo in Ghana in November 2017 will therefore go a long way to enhance trade ties between both countries, offering participants an opportunity to promote their businesses to the right target audience in Ghana and Kenya.
They will be able to better understand business treaties, policies and procedures, whilst stimulating intra-African conversations around joint ventures and partnerships for economic prosperity.
According to Kenya’s Export Promotion Council, Kenya’s exports to Ghana were worth Sh479 million (about $4.6m) in 2014, while imports from Ghana were worth Sh369 million ($3.5 million).
Indeed, trade ties between both countries have grown beyond these levels presently. Not many folks may know that Accra is already Kenya Airways’ second hub in Africa, after its Nairobi headquarters.
Source: Business Daily
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.
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