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INTRA-AFRICAN trade has an enormous potential to catalyse investment and foster growth on the continent.
More than 80 percent of what is produced on the continent is exported to other developed nations.
The latest International Monetary Fund World Economic Outlook report showed developing economies and emerging markets will continue to account for a large portion of the world’s economic growth this year, which is expected be at a rate of 3,2 percent.
The report also reveals that growth in sub-Saharan Africa is also expected to remain low this year, at three percent, down 0,4 percent from last year.
However, some observers say economic cooperation within the continent’s nations could see Africa exceed its four percent economic growth trajectory by next year, as the world economy sees stagnation in key markets such as Europe, China and North Africa.
Sub-Saharan Africa managing director for DHL Express Hennie Heyman’s comparisons of intra-regional trade statistics says Africa’s rates are among the lowest in the world, with less than 20 percent of what is produced in the region remaining on the continent.
“To ensure Africa is equipped to maintain and exceed its growth trajectory of four percent next year, business leaders, the government and the community need to work together towards making Africa an easier place to do business and to stimulate trade between the various African countries,” Heyman said.
Wits University head of the school of economic and business sciences Prof Jannie Rossouw said while the continent was notorious for political instability and presidents who served for longer than two terms, the continent still had a lot of potential for industrialisation and manufacturing.
He said the major drawback in terms of intra-continental trade was that the continent was still dominated by commodities but should the continent industrialise, it could still dominate and compete very well with industrial giants like India and China.
Last week, former state president Kgalema Motlhanthe said intensifying cooperation between African countries in general and countries with the Southern African Development Community region was of critical importance in facilitating economic growth and creating employment in South Africa.
Heyman said trade costs within the continent were estimated to be approximately 50 percent higher than in east Asia due to the number of permits required when transporting goods across certain borders or the fees payable for prolonged waiting periods at the border. – The New Age
Online Reporter