Experts emphasize trade facilitation and export diversification to boost intra- African trade

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Experts emphasize trade facilitation and export diversification to boost intra- African Trade

ECA Press Release 143/2012

Addis Ababa, 05 September 2012 (ECA) -“While there is general consensus that trade can be an important engine of growth for Africa, many African countries continue to encounter considerable infrastructure and other supply-side constraints,” said Stephen Karingi, Director, Regional Integration and Trade Division. Mr. Karingi made the remark at a Regional Workshop on Export Diversification and Trade Facilitation, organised by the United Nations Economic Commission for Africa (ECA) holding from 5-7 September this week. The workshop is aimed at examining export diversification and trade facilitation as a means through which intra-African trade can be boosted.

According to the organizers, the workshop is being held against the backdrop of increased momentum within Africa to boost intra-African Trade. The senior trade officials from Member States, research and development institutions, Regional Economic Communities (RECs) and international organizations are exploring options for developing industrial and productive capacities to boost trade; as well as regional value chains that can fashion new comparative and competitive advantages, offering new export opportunities for African economies.

“The 18^th AU Summit held in Addis Ababa in January 2012, agreed an Action Plan for boosting intra-African trade and to see the share of trade within African economies double within the next 10 years, said Mr. Karingi noting that key to this Action Plan is

“the need to move away from heavy reliance on traditional primary commodities for export.”

Referring to studies by World Trade Organization, Mr. Karingi said that the exports of the Continent as a whole are considerably concentrated in a few products and directed towards a small number of markets.

Furthermore, studies by the ECA show “a higher volume of exports for more sophisticated goods between African countries, compared to African exports to the rest of the world.” He explained that in 2010, 43% of African exports to Africa were in manufactured goods compared to 22% of African exports to rest of the world, a trend he notes, has important policy implications for Africa’s industrial policy with regard to the manufacturing sector that can lead to higher export diversification if better supported.

Karingi underscored the importance of improving trade facilitation, which he said can be done by simplifying the trade relationship between trading partners to ensure that Intra-African trade is undeterred.

“Clearance times of exports and imports at the ports for a sea cargo in Africa is 10.1 days, compared with 2.1 days, while only 30% of the African road network is paved,” said Karingi, adding that each day of delay at customs “is the equivalent of adding 85 kilometres between a country and its trading partner.”

He also called for appropriate funding and special attention to the evaluation of the effectiveness of Aid for Trade (AfT) projects and effectiveness of AfT in Africa”. The continent, said Karingi, continues to require more targeted funds for trade-related projects.

In an effort to better understand possible scenarios towards boosting Intra-African trade, participants will work on trade modelling sessions.