Source: Computed from cometrade time series databases. Figures do not include smuggling and unofficial border trade.
In 1990, intra-African trade as percentage of total regional export stood at about 6 per cent and varied among different items by SITC groupings. The highest imported goods belong to category 5-9 which is the manufactures group; this is followed by category 0+1, then 2+4 and 03 -(see table III.4). This reflects that the structure of Africa's imports is dominated by manufactures and food materials. If market potential is estimated by the volume of import that could be met from the total export, then there exist an overwhelmingly high prospects for categories 5-9 and 0+1 -manufactured goods and agricultural food
materials respectively.
For category 0+1, imports represent about 98 per cent of export. On the basis of calculations in table III.4, there is a wide scope for increasing intra-African trade in the area of foods, beverages and tobacco (SITC 0+1) trade. Should Africa wish to eliminate all the barriers constraining internal regional trade of these commodities including patronizing regional producers, then just about 2 per cent only will be available for export. The same applies to category 5-9 where complete absorption of the entire export leaves a deficit of 155 per cent of requirements that could therefore be met from other regions or create room for expansion in industrial products within the region itself - another great advantage bound to accrue to Africa is by closer trade cooperation arrangements. Except for category 03 -crude petroleum where import - export ratio is in close margin with the levels already traded within the region, Africa has an extensive scope for the expansion of the inter-regional trade. For category 2+4, import from this group represent 45 per cent of export, implying of course, that if exported goods were to go towards satisfying domestic needs of the region,
then only'55 per cent will be available for export. These enormous potential market outlets
for most regional products represent a crucial pillar for the successful take-off of regional cooperation and growth in intra-African trade in the 21st Century.
There are concrete examples which better illustrate the trade potential. These represent cases of diversion of trade to non-regional countries when there are chronic
30 SITC - Standard International Trade Classifications
scarcities for the same commodities among neighbouring African countries. In Southern Africa, Botswana are major producer of meat while Zimbabwe is known for maize. These countries find it profitable to export their respective products to EEC and multilateral organizations while their neighbours Zambia and Namibia, are importing the same products from far countries like Australia and New Zealand. There are many examples of this situation in Africa. Clearly inter-regional trade is the only genuine path to growth and
economic diversification.
Within the COMESA subregion for instance, it has been estimated that goods worth about US$1.8 billion are exported to non-COMESA countries. At the same time, non
COMESA countries import the same goods from other non-COMESA countries31. Even
with this potential the share of intra-COMESA trade in total COMESA trade which stood at 5.65 per cent in 1982 declined to 5.51 per cent by 1992 despite extensive reduction of tariffs on goods originating from member countries and the removal of non-tariff barriers. The system of outward oriented trade is so entrenched in the region that few countries have yet made substantive restructurings to accomodate regional possibilities for inter-subregionaltrade.
5. Subregional perspectives
(a) Economic Community for West Africa
The picture varies among the subregions both from the viewpoint of production and reserves. Since the inception or the ECOWAS, the subregion, has aimed to integrate the various national markets into onesingle market through cooperations and elimination of intra-ECOWAS trade barriers in order to facilitate general economic well-being. At the same time it has been ECOWAS' prime target to raise trade among the countries above the current levels of 4-5 per cent. To achieve these goals however, requires both strong political will and deep structural changes in the production structures of those countries in order to achieve complementarity. Similarity in the currency non-exchangeability and their multiplicity have contributed to the difficulties in the exchange of goods within the community.
Further, the group of ECOWAS countries had as one of their key objective and which was engraved in the treaty and that was to eliminate completely all import duties and taxes on intra-community trade on products originating from the Community. Several of the non-tariff barriers were, however, left to individual state to determine the levels of the reductions and which ones they should do away with completely. The priority order of this group of non-tariff barriers are: State trading monopoly, custom valuation with fixed prices, foreign exchange control, quantitative restrictions, quota, compulsory national insurance, perishment inspection and advance import deposits.
Although the governments have adopted measures to relax most of the restrictions and problems affecting intra community trade, furthermore vigorous efforts ought to be made to ensure that trade is increased substantially. By the early twenty first century therefore,
31 Regional Integration in Eastern and Souther Africa. Paper presented at AERC meeting 1995 by Louis A. Kasekende and Nehemiah Ng'eno.
intra-ECOWAS trade is expected to grow if the following improvements are made to: (a) create appropriate channels; (b) in financing methods; (c) in clearing and forwarding mechanisms; (d) to lower the tariff and non-tariff; (e) balance the industrial setups; and, (f) minimize the transport and communications barriers.
the issue of complementarity
The lack of complementarity in the intra-ECOWAS trade is a major constraint to its growth. At this subregion, countries have been subjected to both internal and external factors to produce similar commodities with limited value added. At the same time large amounts of capital and resources are invested in identical manufacturing projects by adjacent countries. As a result adjacent countries produce the same goods which they cannot sell to each other and which lack the advantage in both quality and quantity to be competitive in the World market. This is a major problem of the ECOWAS region. It is therefore proposed that the whole production and distribution process of manufacturing industry must be restructured so that countries can produce goods for which they have comparative advantages and so growth is achieved through specialization.
In terms of national endowments and comparative advantages,
the countries of West Africa have a high degree of
complementarity. The subregion extends over disparate ecological belts and therefore, in terms of agricultural productions, the crops of the Sahelian countries (groundnuts, cotton) can be very clearly separated from those of the forested states (woods, coffee, cacao). Livestock production is well developed in the Sahel and in Guinea which is not the case in the forest zones.
Mineral resources are also well distributed. There is crude petroleum oil in Nigeria, Uranium in the Niger, phosphates deposits in Senegal and Togo, iron in Mauritania and Liberia, and bauxite in Guinea. The subregion's industrial set is not complimentary not because of raw material distributions but rather because of the exclusively outward orientation of trade in goods and services. The level of intra-ECOWAS trade now stand at about 4-5 per cent with very limited horizontal forms of integration among the countries. The subregion should integrate their production which should include joint explorations and productions ventures. This economic co operation is especially desireable since individual countries do not have sufficient financial resources, enough market access for investments and broad commercial production which they seek to accomplish in the
long-run.
Several goods, commodities and raw materials among the subregional countries are in abundant quantities including food and agriculture products. Some of these goods are already traded in high volumes though further expansion of such arrangements are hampered by transportation and marketing systems that are not well developed. Also, even the basic essentials required for effective trade such as information on tradeables continue to be lacking although their contributions in optimizing trade are
visible.
efficient restructuring in the direction of ECOWAS trade
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