Africa Notes: Regional Trade and Integration

There has been some interesting online commentary on intra-regional trade in Africa.

Trade between African states may be increasing.
It is commonly observed that trade between African states is below what is typically seen in other regions of the world. However, as noted over at tralac, this might be changing. They quote Aileen Kwa:

In terms of non-oil exports Africa’s internal trade is almost on par with its exports to the EU. Furthermore, the trade growth rate within Africa is the second highest after China and before the United States and the EU. Therefore, it is very promising, also in terms of the quality of exports.

Europe should focus more on regional blocs in Africa
Paul Collier suggests that this might be a good time for Europe to reconsider some of its trade strategy with African states, which has often involved individual trade deals with African governments rather than more efficient engagement with Africa’s regional blocs.

And, as I note in my post on the WTO today, there may be more that Africa’s regional blocs need to do before regional integration succeeds
[Africa Notes: WTO Roundup]

South Africa’s attempt at being a gateway to Africa might be underscoring the need for greater regional integration.
Some discussion has been had regarding whether South Africa is–or can be–a gateway to Africa. Clearly it would like to be in that position. Last month, South Africa launched its Dube TradePort, a new international passenger and cargo airport. According to its website it can handle 7.5 million passengers per year right now and will eventually be able to handle 45 million. Its cargo terminal can handle 100,000 tons per year and eventually will handle 2 million tons (more than what LAX currently handles). However, some say this is not enough. Jacqueline Muna Musiitwa and Charles Wachira have a nice critique of the argument that South Africa is a gateway and note there are other competitors (including Angola) for that title in the near-future. TRALAC reports that SA’s most recent Industrial Policy Action Plan has some clues to some of the key challenges:

trade barriers are not the main impediment to raising Africa’s intraregional trade levels, which remain almost trivial when compared with goods and services flows in other territories.
Instead, the main constraints relate to the absence, or inadequacy, of the physical infrastructure linkages required to facilitate trade flows, as well as the continent’s under- developed production structures, which decreases the opportunity for trade in complementary value-added products. (tralac)

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