Recommendations for stimulating intra- intra-African trade

Given these strengths, weaknesses, opportunities and threats, ARIA IV recom-mends four actions for intra-African trade: first, coherent trade policies should be adopted by the economic communities (ECOWAS, SADC, ECEAS/CEMAC and COMESA); second, regional products should be developed further; third, commu-nications and market structures must be improved; and fourth, the grassroots actors must be involved in designing and implementing measures to ease trade flows at the domestic and regional levels.

African economic communities face the enormous difficulty of having no joint trade policies that can overcome the fragmentation caused by the multiplicity of trade, fiscal and monetary policies, which impede trade flows and marginalize some official trade into the informal sector. Achieving a customs union through adopting a CET that grants preferences to unprocessed and locally-manufactured products must be expedited. The Abuja Treaty articulates the path for increasing the official dimension of intra-African trade. We must insist on the need for CETs, the advantages and

disadvantages of their fiscal reforms having been well-documented in reports from WAMU, ECOWAS and COMESA. We reemphasize the need to reduce tariff and non-tariff barriers to trade; facilitate the physical movement of goods; and adapt fiscal record-keeping to the exigencies of informal trade.

5.11.1 Harmonizing trade policies

Intra-African trade weaknesses cannot entirely be attributed to the absence of reg-ulations or insufficient rules. Information asymmetries between those responsible for applying the law and those who must comply raise of the many technical and administrative constraints referred to above. To solve the problem, we must design transparent fiscal rules accessible to trade operators; train them about the letter of the law and how to apply it; disseminate community texts and domestic rules per-taining to trade; promote advocacy and lobbying for the effective implementation of legislative texts and rules and regulations; set up electronic trade monitoring and information systems; and promote access to funding (USAID/Agribusiness and Trade Promotion (ATP), 2008).

5.11.2 Increasing regional market integration

Beyond the considerations of shared trade policies, intra-regional and intra-African trade require more value-added for unprocessed products through stronger value chains. This can be achieved in production, processing and marketing. Then the rules and regulations and the operational provisions in the community texts relating to trade will clearly guide the formulation of joint specifications, product quality as well as global strategies for improved production. This will be achieved through standardizing processing, storage and transport of products and formulating the necessary specifications to guarantee the traceability of products.

Processing primary products also requires better quality controls and the right equip-ment to test quality and ensure standards are met. It also means developing local and regional markets, fostering a private-sector market in construction, for example.

This further creates jobs, which benefits from three incentives: implementing a vol-untarist agricultural policy, reforming the international rules of trade and promoting regional trade (Soulé, 2008).

5.11.3 Improving communications and market structures

A major bottleneck to intra-African trade is the inadequacy of its communications infrastructure. Border areas often have a dense network of roads leading to periodic markets. These attest to the vitality of exchange and integration at the grassroots level.

An opportunity exists for states to adopt a voluntarist policy with respect to invest-ing in infrastructure, includinvest-ing rural and feeder roads, which permit produce to be transported to markets, ports, roads and railway hubs.

The thorny problem of storage may be solved by a system of certified storehouses that conform with storage and conservation standards until market conditions favor the offload of stock. The producer receives a loan from a funding institution before storage and repays it later. An agent from the funding institution would be respon-sible for debt collection once the profitable sector had been found for selling the goods. Should the traders not be able to sell all their stock, the availability of storage facilities would help to reduce losses.

Technological advances are leading to a new understanding about the saying, “time is money,” which is changing trading habits. The mobile phone communicates trading information efficiently and is an essential tool. Regional telecommunications poli-cies aim to expand coverage rather than ensuring concentric circles around urban centres. The present shortcomings in telephone use that shortchange rural areas are being corrected. Just as roads are a precursor to development, Global System for Mobile Communications (GSM) can improve trading efficiency. It is a powerful tool for family solidarity, early warning and strategic monitoring.

5.11.4 Participation of informal traders

Trade barriers may be lifted if obstacles to supply are taken into account: the limits to the insertion of African products on the markets, equality of access to resources and services, the ability to negotiate among partners, access to credit and training in its use, and knowledge about standards on the part of all actors involved. An impor-tant measure would be to organize relationships between traders and producers to improve supply. Trade growth depends on growth in the production of goods. The promotion of incentive mechanisms could increase local production and solidify relations built on trust between traders and producers, based on rigorous and simple specifications suited to real production conditions. Production contracts binding some traders and producers of agricultural commodities attest to the feasibility of

modernizing these forms of coordination between production and commercializa-tion. Promoting inter-professional confederations of the sectors for primary prod-ucts in regional trade may lead to improved intra-African trader relations.

In the final analysis, involving actors in trade facilitation could improve relations between national public institutions and regional institutions on the one hand, and professional producer organizations of producers, processors and traders on the other; strengthen public-private partnerships, and ensure a correlation between secu-rity services, customs officials, export promotion agencies and decentralized funding institutions responsible for organizing market credit with the varied needs of actors and locally elected officials.

All trade-related public and private-sector services, including NGOs, have special skills to share with operators, thus intra-African trade is not only the business of cen-tral, national and community institutions but a shared concern. Regional confedera-tions and networks of farmer and trading organizaconfedera-tions could lead to a participatory agricultural policy, community trade that is better suited to minimizing conflicts and overcome the challenges to economic growth in Africa.