The African Union (AU) is pulling out all stops to improve the import and export industry within African countries.
Despite being rich in mineral resources, African countries are struggling to trade with each other. When it comes to intra-trade, in comparison to other continents, intra-African trade stands at around 12% while intra-regional trade by Europe, North America and Association of Southeast Asian Nations (ASEAN), stood at 60%, 40% and 30%, respectively.
According to an African Union report, in terms of global goods trade, the continent accounts for only 1.8% of imports and 3.6% of exports. These rates are even lower in the services sector with only 1.7% and 1.8% of imports and exports, respectively.
In an effort to improve the continent’s intra-trade statistics, the African Union organised the inaugural Intra-African Trade Fair (IATF) hosted by Egypt from 11 to 17 December.
The aim of the IAFT is to drive the continent’s export manufacturing development. The fair comes as a follow-up to the signing of the African Continental Free Trade Area (AfCFTA) agreement in March 2018, which seeks to enhance trade and economic growth across Africa.
The trade fair contributes towards the objective of increasing intra-African trade from US$170 billion in 2014 to US$250 billion and by so doing, ensure that intra-African trade reaches 22% by 2021.
Intra-Africa trade is projected to be a US$ 6 trillion opportunity for Africa in the short term and US$12 trillion in the long term, according to Forbes magazine.
African Export Import Bank (Afreximbank), which collaborated with the AU and Egyptian government in hosting this year’s trade fair, said it will use the trade fair as well as other interventions to assist the continent to realise its trade potential and achieve positive transformation for Africa.
Speaking at the IATF, AU Commissioner for Trade and Industry, Albert Muchanga stressed the importance of the trade fair in bringing about economic transformation on the continent. He also called on all African Union member states to ratify the AfCFTA and make a single African market of over one billion people a reality.
“If we are to create one African market, in line with the vision of the African continental free trade area, all African Union member states must sign and ratify the agreement establishing the African Continental Free Trade Area. In this way, its landscape will be fully integrated. I am glad that the ministers responsible for trade are here. I am sure they will do the needful and take us closer to realising the vision of the African Union and Agenda 2063, which is an integrated, prosperous and peaceful Africa, driven by its own citizens, representing a dynamic force in the global arena,” he said.
Muchanga urged the six AU member states, which have not signed the AfCFTA agreement yet, to do so and called on countries that have signed to proceed forward with the ratification. Commissioner Muchanga expressed his confidence that by February 2019, the 22 ratifications needed for the Agreement to enter into force will be will be granted.
Speaking at the same occasion, Chairman of the Board of Directors of the African Export Import Bank (Afreximbank), Olusegun Obasanjo, said that IATF would contribute immensely to the implementation of the AfCFTA.
He said the trade fair was a crucial instrument in making the AfCFTA work, adding that Africa needs to focus on what trade is needed, where the markets are, the size of, and the standards in those markets, and how to join the value chains that serve them.
“The African continental free trade agreement and events such as this intra-African trade fair enthuse me about the prospects for Africa, and the opportunities to raise Africa’s bar to global competitiveness, which will be kick-started by intra-African free trade,” he said.
He added that it is their duty to create the environment where the entrepreneurial spirit of Africans can succeed.
“Stronger economies yield the rewards of better health, education, improved employment opportunities and prosperity for all. I want our future generations to have greater expectations, greater choices and greater opportunities to succeed. It should be their right and I want this to become the norm rather than the exception,” he said.