WEF: Africa regional integration key to more trade

The slow pace of regional integration and poor infrastructure are hampering trade between countries in Africa, delegates at a World Economic Forum (WEF) meeting said on Friday.

African countries do more trade with the rest of the world than with each other, losing out on opportunities for growth.

“There are a lot of opportunities in the African market, but market links are too weak to allow exploitation of those opportunities,” said Elizabeth Tankeu, trade and industry commissioner at the African Union.

“Infrastructure remains a barrier,” she told the WEF Africa summit in Cape Town.

Tankeu said true regional integration was moving at a slow pace because countries were reluctant to forgo some of their legislative control, and the AU could not interfere with individual countries’ legal frameworks.

Africa has a number of trade groupings, some of which overlap, hampering efforts to harmonise rules.

Trade groups include the Economic Community of West African States (Ecowas), the Southern African Customs Union (Sacu), the Southern African Development Community (SADC) and the Common Market for East and Southern Africa (Comesa).

Road networks and rail lines also pose problems in most African countries, increasing the cost of doing business.

“Logistics is the determining factor of access to markets,” said Salim Ismail, CE of textile operator Groupe Socota in Madagascar.

“In some areas of Africa our freight costs are twice the costs of our competitors in the United States and Asia and our lead times are three times those of our competitors.”

South African Trade and Industry Minister Mandisi Mpahlwa added: “We have to move a lot faster to remove trade barriers in Africa. It is a lot easier to trade outside the continent than it is to trade within.”—Reuters