News / Economy

African Union Pushing for More Intercontinental Trade

Laborers work at a railway station construction site in Ethiopia's capital Addis Ababa, Sept. 16, 2013.
Laborers work at a railway station construction site in Ethiopia's capital Addis Ababa, Sept. 16, 2013.
TEXT SIZE - +
Marthe van der Wolf
— Both the African Union and the U.N. Economic Commission for Africa (UNECA) have held countless meetings and conferences on increasing intra-Africa trade. Efforts so far, however, have not translated into results.
 
How intra-Africa trade can be improved is one of the most discussed topics at the AU and UNECA. African countries do only 11 percent of their foreign trade with other countries on the continent. In comparison, Asian countries do 50 percent of their trade with each other, while European Union countries do 70 percent.
 
UNECA Regional Integration and Trade Division Director Stephen Karingi said several conferences during the past decades were needed to find common positions.
 
“They have had to come up with common positions on their discussions, negotiations with bilateral partners, for instance the European Union. But much more importantly, they had to come and agree on what they need to do as sub-regions in the context of deepening regional integration through the regional economic communities,” said Karingi.

World Bank urges changes

A 2012 World Bank report says the continent loses billions of dollars annually because of continental trade barriers. A U.N. report on intra-Africa trade released in July, urges African governments to boost the private sector, reduce trade barriers and expand infrastructure.
 
The slow progress makes it difficult for businesses to tap markets in surrounding countries.  

The Jittu Horticulture company is Ethiopia’s biggest exporter in its sector. General Manager Jan Prins said Ethiopia has huge trade opportunities, but that there are too many challenges when trying to trade with neighboring countries.
 
“The major challenge is to reach these markets. And it can either be logistic problems like over flooded border areas, bad roads or no roads, trade barriers, political issues or security issues," Prins said. "For Ethiopia it is very difficult to reach the markets in the surrounding countries.”

Poor infrastructure, visa difficulties, corruption and extremely high transportation costs are just some of the barriers companies face when trying to trade within the continent. A truck in Africa will, on average, only travel nine kilometers an hour because of the many checkpoints. Therefore, transport costs make up 40 percent of a product's price.

Diversity of trade

Intra-Africa trade, both imports and exports, amounted to $131 billion in 2011. UNECA's Karingi said this number could grow as trade within the continent is much more diverse than trade with countries outside the continent.
 
“If you take the top five products that, say Ghana, trades with the rest of the world and you compare that with the top five that Ghana trades with the rest of Africa, you will find that four out of five of the commodities, tariff lines, that Ghana trades with Africa are actually value added. Whereas five out of five of the trades with the rest of the world, there is no value addition. And you can repeat the same stories on other countries,” said Karingi.

African Union countries have agreed to make the continent a free trade zone by 2017. African Union Trade and Industry Department Director Treasure Maphanga said it is up to governments to make the goal of a continental free trade zone a reality.

“In many countries there is political will that exists at a certain level. Intra-Africa trade does not just depend on one ministry, it does not just depend on the head of state. It depends on the whole government machinery.  And coordinating toward a specific goal,” said Maphanga.

The African Union will hold another conference on how to improve trade within the continent at the end of October.

You May Like

Abuja Blast Impacts Lives, Livelihoods

Officials say they are looking at ways to help bombing victims and boosting security More

Cambodia Technology Adviser Criticizes Cybercrime Draft Law

Phu Leewood says current criminal code can be used to prosecute offenders and that there is no need for a separate law More

Photogallery A Year Later, Boston Remembers Deadly Marathon Bombings

City pauses to honor victims and salute emergency workers who came to their assistance in frantic moments after blasts More

This forum has been closed.
Comment Sorting
Comments
     
by: Tom from: Texas
October 01, 2013 7:55 AM
Intra Africa trade will only work if is roads that link each country to one another and less border restrictions.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid

World Currencies

EUR
USD
0.7287
JPY
USD
103.22
GBP
USD
0.6027
CAD
USD
1.0991
INR
USD
60.191

Rates may not be current.