Intra African trade could reach $400 billion with closure of information gap, Oramah
The size of intra-African trade could be doubled from the current level of about $170 billion per year to almost $400 billion by addressing the issue of availability of market information on the continent.
This according to Dr. Benedict Oramah, President of the African Export-Import Bank (Afreximbank).
In an address during the opening of the meeting of the Afreximbank Advisory Group on Trade Finance and Export Development in Africa, held as part of activities to mark the 24th Annual General Meeting of the Bank, Dr. Oramah said that lack of knowledge of the continent and limited access to trade information among African businesses constituted major constraints to cross-border trade.
He cited a study on the regional value chains for leather and leather products, jointly commissioned by Afreximbank, UNCTAD and the Commonwealth Secretariat, which found that Australia was the main source of tanned hides and skins for Southern Africa, including South Africa, even though Zambia exported the same products at lower costs and its exports were higher than South Africa's imports.
The report also showed that South Africa imported leather that had been further prepared after tanning from India at double the price at which Ethiopia exported such leather while Mauritius and Nigeria imported leather products from Italy and Belgium at much higher costs than what South Africa and Botswana exported them for.
In the same way, Kenya imported raw hides from New Zealand while Burundi exported the same product to the world at a much lower price and West African countries, on average, imported meats worth more than $3 billion per annum from Argentina and Australia even though Mali, Chad and Sudan could supply all the meats required by the region, he added.
The President argued that if Europe, with a population of 550 million people in 28 countries and a land area of 10.2 million square kilometres, could have intra-Europe trade of about $6 trillion, it was possible for Africa, which has double that population, nearly double the number of countries and three times the land size, to achieve the same level, if not multiples, of such trade.
In his contribution, Claver Gatete, Minister of Finance of Rwanda, called for increased effort to achieve economic integration in Africa as a way of ensuring the continent's development.
The meeting also featured the launch of the 2017 Africa Trade Report, an Afreximbank annual flagship publication, by President Oramah.
The AGM Activities, which ended on 1 July, began on 28 June with two days of seminars and included an investment forum, hosted by the Rwandese Government, and a trade exhibition, which also took place on 30 June, before the formal AGM on 1 July. The activities concluded with a conversation session with President Paul Kagame of Rwanda.
More than 100 speakers, including ministers of trade, central bank governors, academics, African and global trade development experts, and business leaders, spoke during the four days of the Annual General Meeting and related events, which focused on the theme "unlocking Africa's trade potential".