Regional trade in Africa lagging

LACKING: GOOD SUPPLY CHAIN MANAGEMENT

‘Businesses under growing pressure to remain competitive in challenging economy.’

Recent findings by African Economic Outlook reveal that, despite an average annual growth in exports of 8.5% since 2010, trade between African regions remains low when compared with other parts of the world.

The report said intraregional trade accounted for 16% of Africa’s total trade in 2014, mainly stimulated by manufactured goods, accounting for 60% of total regional trade.

Hennie Heymans, CEO of DHL Express sub-Saharan Africa, concurred with the findings, saying in a statement that the potential of African trade had not yet reached fruition.

Heymans said: “There are multiple opportunities to increase intraregional trade, especially in line with the Tripartite Free Trade Agreement. If used properly, this agreement has the potential to significantly boost economic growth in the region.”

Heymans also pointed out that if intraregional trade in Africa was to be boosted, it was crucial to put in place effective logistics infrastructure to facilitate the movement of goods across borders and, ultimately, reduce the cost and time of trade.

For countries looking to boost interregional trade, Heymans said it was vital to consider the time and costs associated with transporting goods.

“It is important to take a holistic approach when it comes to managing supply chain risk in order to achieve greater visibility, flexibility and control,” he said. “Businesses in Africa are under increasing pressure in the current economic climate to remain competitive, both locally and globally, and sometimes lack the ability to build resilient supply chains.”

According to the African Economic Outlook, the gross domestic product of major sub-Saharan African cities, including Johannesburg, Cape Town, Lagos and Luanda, was expected to increase, citing the quality of infrastructure and logistics as key contributing factors.

“These findings demonstrate the important role that effective logistics play in boosting a country’s economic growth by enabling trade,” said Heymans. –