Browsing: Intra-regional trade

African Trade

Among the various ways to strengthen the private sector and thus promote African trade, African governments must enable the private sector to play an active role in realising regional integration objectives.

AfCFTA’s successful implementation can boost trade and promote Africa’s economic recovery and growth. The AfCFTA is the world’s most extensive free trade area in terms of size and number of nations, with a combined GDP of around $3.4 trillion.
Increased integration would improve incomes, generate employment, stimulate investment, and make establishing regional supply chains easier. In comparison to Africa’s external trade, intra-African trade remains tiny. In 2020, just 18 per cent of exports went to other African nations.

The lack of harmonised standards, failure to implement the Single African Air Transport Market (Saatm) and the export of raw commodities remain the continent’s biggest obstacles to trade.

In addition, African countries have some of the most rigid visa and work permit requirements, they have multiple testing agencies and erect unnecessary roadblocks for random checks along transport corridors which increases the cost of cross-border trade.

This, eventually, deals a blow to the Micro, Small and Medium Enterprises (MSMEs) which also happen to be the backbone of the continent’s economy.

Dr. Mathuki has hit the ground running and having come from being at the helm of the East African Business Council (EABC), a regional business arm of the EAC, he understands the struggles that the common trader faces while doing business within the bloc.  This makes him an ideal leader as he makes decisions based on the experiences he has been encountering when he was on the other side of the table.  

Dr. Mathuki has now vowed to improve trade in the region which currently stands at 15 per cent by removing some of the challenges threatening the stability of regional trade.  According to him, some of the persistent NTBs include restricted market access for goods and un-harmonized charges that continue to frustrate intra-EAC trade. He says that investment by increasing transaction costs and curtailing movement of goods are contributing to the low intra-EAC trade.  “EAC intra-regional trade is under 20 per cent, and it is my mission to ensure that this grows to at least 50 per cent in the next five years,” he said.