Presentation By Progress on Intra-African Trade June, 2011 Emmanuel J. Chinyama ECA 7 th Session of the Committee on Trade, Regional Cooperation and Integration June 2011 Addis Ababa, Ethiopia

Outline of the Presentation  Introduction  Direction of Africa’s trade with major trading partners  Direction of trade within African regions  Trade performance by countries  Intra-African trade potentials  Challenges of Intra-African trade  Conclusion and policy recommendations

Introduction  The significance of trade to economic growth.  Regional Integration will strengthen Africa’s economic independence and empowerment with respect to the rest of the world.  The role of regional integration in promoting trade in Africa.  Focus of the presentation.

Direction of Africa’s trade with major Trading Partners (exports) Direction of Exports (in million of US$) - average between 2000 and 2007 RECsAFRICACHINAASIAEUJAPANUSAROWWORLD CEMAC CEN-SAD CEPGL COMESA EAC ECCAS ECOWAS IGAD IOC MRU SADC UEMOA UMA

Share of Import Sources ( ) RECAFRICACHINAASIAEUJAPANUSAROWWORLD CEMAC CEN- SAD CEPGL COMES A EAC ECCAS ECOWA S IGAD IOC MRU SADC UEMOA UMA

Intra REC-Trade (% Growth)

Intra-Africa Trade (% Growth)

Intra-African trade potentials  Africa trades more with the rest of the world than it does with itself.  Rich endowments among African countries  Africa has a large population of about one billion people.  Reforms which are key to boost trade.  Diversification of finished products.

Intra-African trade potential  Effective implementation of decisions agreed at continental level.  Increased demand by the emerging economies such as China, India, Brazil, and others.  Rich fertile soil for agricultural production.

Challenges Limiting the Potential of Intra-African Trade  Lack of diversification and competitiveness.  The nature of African economies.  Weak trade-related infrastructure.  Multiplicity and inconvertibility of currencies.  Delays at customs which, on average, are longer than in the rest of the world.  A large proportion of African landlocked countries.

Challenges Limiting the Potential of Intra-African Trade Weak Infrastructure Share of paved roads in Africa by Sub-regions

Conclusion  There is a potential for intra-Africa trade to improve.  There is need to address the supply constraints in order to make Africa’s products competitive;  There is need to accelerate trade reforms, including exports diversification;  Deepening of regional integration and accelerating intra-Africa trade will need strong commitmenst from the Member States.

Conclusion  High trade costs prevent many African countries to the full realization of gains from the globalization.  Members States should continue their reforms including export diversification.

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