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Tuesday, 24 April 2012

Intra-African trade: too significant to underestimate

What is the assessment of Intra-African trade? While the WTO maintains its long-standing opinion and says that trade among African countries is too low and “stagnant”, experts at the South Centre, an inter-governmental think tank of developing countries, stress that trade is significant in manufactured goods and seems to be leading to a new path to industrialisation.
Valentine Rugwabiza, deputy director general of the WTO, stands by her statements, saying that last year, African Intra-continental trade “stood at 10 percent of the continent's overall trade" and “Africa's share in world trade is also very small”, though this is growing vis-a-vis emerging economies. She underlines that a number of problems have been inherited from the colonial era, such as “a rigid division of labour” and the over-reliance on the export of primary products (i.e., natural resources). Furthermore, she recalls the length of time it takes for Africa to deliver its products to importing countries, compared to other regions such as Latin America or the Caribbean.
The Geneva-based South Centre, however points out that intra-African trade is low “in absolute terms”: According to a trade policy officer of the centre "in terms of non-oil exports Africa's internal trade is almost on par with its exports to the EU […] the trade growth rate within Africa is the second highest after China and before the United States and the EU . Therefore, it is very promising, also in terms of the quality of exports. Most of Africa's manufactured goods go to Africa. So if the continent wants to industrialise, the market that provides the best opportunities is Africa, not China, the U.S., or the EU."

Source: IPS/CTA