SA share of Africa trade declines

DESPITE various initiatives to boost trade within Africa, a new study shows there has been a steep decline in trade between South Africa and other African nations.

The United Nations Conference on Trade and Development’s (Unctad) latest report on economic development in Africa, released on Thursday, has found total exports to other African countries reached 15.5% in the five years to 2011, a large drop from 43.4% reached in the five years to 2000.

Total imports plummeted from 21.6% to 6.8%.

African Union (AU) leaders last year committed to act on boosting intra-African trade, a plan which was reaffirmed later at the AU summit.

Earlier this year, Trade and Industry Minister Rob Davies told the Brics (Brazil, Russia, India, China and South Africa) business forum that other members of this trade bloc enjoyed big domestic markets provided by their large populations, while South Africa was small in comparison.

“If you add up numbers on the continent then you have a critical mass that can support the new industrial wave in Africa,” he said.

But Patrick Osakwe, head of the Africa section at Unctad, said previous efforts to promote trade within Africa had “modest” results due in part to the weak implementation of regional trade agreements, a lack of economic diversity and weak infrastructure.

The continent also needed to move away from focusing on processes and institutional structures and should rather opt for an approach geared more towards development, he said.

“Countries must change their approach to regional integration. [From] 2007 to 2011, the value of intra-African trade increased by a factor of four.”

The report showed trade within Africa reached $130-billion two years ago. But this is not much, considering intra-African trade accounted for 11% of Africa’s total exports, while that of other developing economies such as Latin America and Asia reached 21% and 50% respectively.

And although South Africa dwarfed Mali and Togo in terms of GDP, according to World Bank data, these West African countries did more than half of their trade with other African nations. They also made the most progress in putting their regional trade agreements into action, with more than half of businesses confirming they could now move goods and transport more freely.

“African regional economic communities have signed many agreements on the removal of tariff and non-tariff barriers,” reads the Unctad report.

“While some progress has been made in implementation of these agreements, it is a well-known fact that the implementation rate has generally been low and continues to hamper regional trade,” it says.