Trade volumes leave out informal trade

The report reveals that Africa remains on the sidelines of global trade, accounting for just 2.8% of official total trade flows last year, while, intra-African trade is severely limited, accounting for just 14.4% of total African trade in 2019. This contrasts sharply with intra-continental trade elsewhere in the world, which reached 73% in Europe and 52% in Asia last year. Intra-African trade was worth just $147.8bn last year, down from $156bn in 2018. Moreover, South Africa alone was involved in 23.1% of African cross-border trade last year, followed by Democratic Republic of Congo with 7.7%. Nigeria takes third spot, despite the fact that other African countries account for only 3% of its imports and 13% of its exports, with the latter dominated by oil exports. Indeed, the volume of Nigerian trade with the rest of the continent actually fell last year, from $10.9bn in 2018 to $10.4bn, as the country’s share of intra-African trade remained constant at about 7.03%. The next biggest contributors to intra-African trade are Democratic Republic of Congo, Nigeria, Namibia, Zambia, Egypt, Zimbabwe, Botswana, Cote d’Ivoire and Congo Brazzaville, in that order. However, the real volume of cross-border trade in Africa is likely to be significantly higher because of substantial informal crossborder trade. More than any other region in the world, a large proportion of intra-African trade is informal. Although it is by its very nature difficult to quantify, the report estimates that ICBT could be worth as much as 80% of the value of formal trade in Eastern Africa. Informal trade could be brought into the mainstream to drive greater trade between African states as the African Continental Free Trade Agreement (AfCFTA) evolves. Indeed, the 2020 African Trade Report takes ‘Informal Cross-Border Trade in Africa in the Context of the AfCFTA’ as its theme. AfCFTA offers an opportunity to integrate formal and informal trade activity to produce accurate cross-border trade statistics across Africa. Informal cross-border trade is often widespread and organised, covering important commodities, such as grains, petroleum, coffee and edible oils. The removal of tariffs and non-tariff barriers through the implementation of the African Continental Free Trade Area agreement should see greater official trade between surplus and deficit countries, and reduce levels of smuggling.