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Thursday, 20 July 2017

Intra-African trade could double to $400b

There is a long held debate about the volume of intra-African trade. Some say it is 10 per cent, others say it is underestimated because it could be more than that, and put it at 12 per cent. It is about 3 per cent of global trade. According to the African Trade Policy Centre (ATPC) of the United Nations Economic Commission for Africa (UNECA), global trade (in current prices) increased from $13 trillion in 2000 to an estimated $30 trillion in 2010, but Africa’s share in world trade has been in decline since 1980 and currently stands at about three per cent. According to the 2010 International Trade Statistics of the World Trade Organization compared to other regions, intra-African trade is low. For instance in 2009, intra-European trade was 7 per cent, intra-Asian trade stood at 52 per cent and intra-North American trade was 48 per cent. Intra-South and Central American trade was 26 per cent but intra-African trade was 11 per cent. Africa produces large amounts of raw materials, which are exported as primary products. The data shows that the high concentration of African exports in primary products are made up of agricultural and food products, 9.4 per cent, primary products 36.43, 35.4 per cent are other industrial products and 18.9 per cent of services. There is however consensus that intra-African trade has the potential to boost economic growth on the continent. Dr. Benedict Oramah, President of the African Export-Import Bank (Afreximbank) has recently said the size of intra-African trade could be doubled from the current level of about $170 billion per year to almost $400 billion by addressing the issue of availability of market information on the continent. He was reported to have said in an address on June 29, 2017 during the opening of the meeting of the Afreximbank Advisory Group on Trade Finance and Export Development in Africa, that lack of knowledge of the continent and limited access to trade information among African businesses constituted major constraints to cross-border trade.

Source: Ghana Business News