Presentation By Progress on Intra-African Trade June, 2011 Emmanuel J. Chinyama ECA 7 th Session of the Committee on Trade, Regional Cooperation and Integration June 2011 Addis Ababa, Ethiopia
Outline of the Presentation Introduction Direction of Africa’s trade with major trading partners Direction of trade within African regions Trade performance by countries Intra-African trade potentials Challenges of Intra-African trade Conclusion and policy recommendations
Introduction The significance of trade to economic growth. Regional Integration will strengthen Africa’s economic independence and empowerment with respect to the rest of the world. The role of regional integration in promoting trade in Africa. Focus of the presentation.
Direction of Africa’s trade with major Trading Partners (exports) Direction of Exports (in million of US$) - average between 2000 and 2007 RECsAFRICACHINAASIAEUJAPANUSAROWWORLD CEMAC CEN-SAD CEPGL COMESA EAC ECCAS ECOWAS IGAD IOC MRU SADC UEMOA UMA
Share of Import Sources ( ) RECAFRICACHINAASIAEUJAPANUSAROWWORLD CEMAC CEN- SAD CEPGL COMES A EAC ECCAS ECOWA S IGAD IOC MRU SADC UEMOA UMA
Intra REC-Trade (% Growth)
Intra-Africa Trade (% Growth)
Intra-African trade potentials Africa trades more with the rest of the world than it does with itself. Rich endowments among African countries Africa has a large population of about one billion people. Reforms which are key to boost trade. Diversification of finished products.
Intra-African trade potential Effective implementation of decisions agreed at continental level. Increased demand by the emerging economies such as China, India, Brazil, and others. Rich fertile soil for agricultural production.
Challenges Limiting the Potential of Intra-African Trade Lack of diversification and competitiveness. The nature of African economies. Weak trade-related infrastructure. Multiplicity and inconvertibility of currencies. Delays at customs which, on average, are longer than in the rest of the world. A large proportion of African landlocked countries.
Challenges Limiting the Potential of Intra-African Trade Weak Infrastructure Share of paved roads in Africa by Sub-regions
Conclusion There is a potential for intra-Africa trade to improve. There is need to address the supply constraints in order to make Africa’s products competitive; There is need to accelerate trade reforms, including exports diversification; Deepening of regional integration and accelerating intra-Africa trade will need strong commitmenst from the Member States.
Conclusion High trade costs prevent many African countries to the full realization of gains from the globalization. Members States should continue their reforms including export diversification.
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