Intra-African trade must grow

Union Commission Chairman Jean Ping said at a summit today in Addis Ababa, Ethiopia’s capital.
“The growth of intra-African trade would lay the foundations for a stronger and more sustainable economic growth.” Trade between African countries accounts for 11 percent of the total, compared with 47 percent in Asia and 70 percent in the

European Union, according to the African Union. Increasing that percentage may help offset the impact of a slowdown in the euro region and other OECD countries, the Economic Commission for Africa said on January 26. Growth on the continent slowed to 2,7 percent last year from 5 percent in 2011, it said.
A doubling in intra-African trade would add 2 percent to the continent’s gross domestic product, Obiageli Ezekwesili, vice president for Africa at the World Bank, said in Addis Ababa before the summit. African leaders are looking to tap into the continent’s US$2 trillion economy and 1 billion population to promote growth, she said in an interview.

“That’s a huge domestic base to drive domestic demand,” Ezekwesili said. “Every bottleneck that stands in the way of the integration of that into a sizeable market is seen by the leaders as something they can work on as a collective to remove.”
Commission chairman Ping urged faster economic integration on the continent and endorsed a plan by African ministers to create an economic bloc for central, western and northern Africa that would emulate a proposed free-trade area in southern and eastern Africa. The African Union summit is being held at the 54-nation body’s new US$200 million headquarters, built by China State Construction Engineering Corp. on the ruins of Ethiopia’s former maximum security prison, known as Alem

Bekagne, which in the Amharic language means “I have given up hope on this world.” The Chinese government funded construction, according to the African Union.
China’s economic involvement in Africa is valued at US$150 billion, with more than 2 000 companies working throughout the continent, Jia Qinglin, chairman of the National Committee of the Chinese People’s Political Consultative Conference, said at the official opening of the building yesterday. China will provide 600 million renminbi (US$95 million) of free assistance to the African Union over the next three years, Jia said today.

“To further consolidate and strengthen unity and cooperation between China and Africa and promote common development is an important cornerstone of China’s foreign policy, and a long-term strategic choice that China is firmly committed to,” he said.

The African Union named Benin President Thomas Yayi Boni as the ceremonial head of the African Union, replacing Equatorial Guinea President Teodoro Obiang Nguema Mbasogo. Under African Union rules, the bloc’s political leadership rotates annually between Africa’s five geographic regions. Boosting intra-regional trade may help solve the “challenges that the African continent faces each day,” Yayi Boni said. African countries are making “slow and generally insufficient” progress toward meeting the United Nations Millennium Development goals, according to an assessment published on the Economic Commission for Africa’s website last year. The goals aim to halve extreme poverty, halt the spread of AIDS and provide universal primary education in developing countries by 2015.

“Trade and investment are crucial for development,” UN Secretary-General Ban Ki-Moon said in his address to the summit. “But Africa’s future also depends on investments in civil, political, economic, social and cultural rights.” Tomorrow, African leaders will elect a new head of the African Union Commission, which runs the organization’s day-to-day affairs, a spokesman for the African Union said today. The body previously said the election would be held today. South African Home Affairs Minister Nkosazana Dlamini Zuma is challenging Ping, whose four-year term has ended. Dlamini- Zuma would be the first woman to head the body since it was founded as the Organisation of African Unity in 1963. The African Union replaced the OAU 10 years ago.

Going forward African countries have been unable to boost trade among themselves and hence have exposed themselves to a more organised Europe, Asia and America who have taken advantage of Africa’s inter-trade loopholes. The message from Addis Ababa should give Africa a new thinking and a new trade thrust that must make it more organised, more focused and more relevant to world trade trends.

In the end, Africa should be able to freely choose who to trade with, regardless of whether that country is in good books with America, Britain or France.
Africa must put a price on its natural resources and not allow foreigners to determine the price but the key point is that Africa can only achieve this by first boosting inter-regional trade, continental trade and unity of purpose.

Moses Mugandi-Mbui Sellase is an Ethiopian political scientist.