Intra-African trade is an untapped opportunity on the continent

Africa is attracting global trade and investment on a mass scale. For fast emerging and established countries alike, our continent is one full of potential, and one growing on average at 6% a year.

Incomes are rising, bringing prosperity to a burgeoning middle class. The number of households with discretionary income is projected to rise by 50% over the next 10 years, reaching $128m. Our natural and human potential is enormous, being home to over 50% of the global uncultivated agricultural land, and with a young and energetic population with a median age of 20.

But increasing trade internationally has come at a cost. Africa’s trade between its own nations is now extremely low at around 12%, half of the share 15 years ago. Trade within regional borders is 70% and 50% in Europe and Asia respectively, and even 21% in fast growing South America.

For those who work on the continent, it’s clear to see why. Moving goods and people around is extremely difficult. A small percentage of African roads are paved, rail networks are poorly interconnected and ports and airports alike have limited routes and capacity. Often, it’s easier to trade internationally than locally, with current infrastructure built around getting our goods out to global hubs and beyond. In a recent report, Ecobank found large numbers of traders in Nairobi sending goods to Dubai first in order for them to be transported to other African nations. 

An array of regional trade agreements (RTAs) has brought some attempt to foster intra-regional trade, but there is still often a fairly inconsistent and cumbersome business environment across neighbouring countries. The South African Development Community, of which Angola is a member, now averages about $11bn of trade annually. However, estimates suggest that figure could easily triple if smarter and more business friendly policies were put in place. From my experience in agribusiness and construction, tackling the uncoordinated agricultural policies and the damaging combination of fluctuating import and export tariffs would be good place to start.  READ MORE

Source:  Álvaro Sobrinho: How it is made in Africa   #IFAMAFRICA