Inception Workshop on Mainstreaming Gender into Trade Policy April 2009, Addis Ababa Overview of Intra-African Trade By Daniel A. Tanoe NEPAD & Regional Integration Division, ECA

Introduction OUTLINE  Importance of Intra-African trade  Africa’s export and import patterns  Challenges of intra-African trade  Some basic facts on Informal sector trade in Africa

Why intra-African trade is important AU vision - A common continental market for goods and services. Common Market makes sense for Africa’s 53 mostly small economies. Trade as an engine of growth More trade within Africa – Retention of wealth

Africa’s export and import patterns Africa's export and import patterns by RECs (Regional Economic Communities)

Africa’s export and import patterns Intra-REC exports (%percent) (Average between ) Source: ECA, compiled from IMF DOT 2006

Exports to the rest of Africa (%) ( (Average between ) )‏ Source: ECA, compiled from IMF DOT 2006 Africa’s export and import patterns

Intra-REC imports (%) (Average between ) Source: ECA, compiled from IMF DOT 2006 Africa’s export and import patterns

Imports from Rest of Africa (%) (Average between ) )‏ ‏ Source: ECA, compiled from IMF DOT 2006 Africa’s export and import patterns

Africa’s export and import patterns Growth trends

Africa’s export and import patterns Intra-REC indices of export trends (base year = 2000)‏

Exports to Africa Countries’ Performance

Share of exports within Africa (%) (Average between

Imports from Africa Countries’ Performance

Share of imports from Africa (%) (Average between ) Imports from Africa Countries’ Performance

Africa’s export and import patterns Africa’s merchandise exports

African merchandise exports Africa’s export and import patterns

Overall Intra-African Trade Picture Persistently small intra-African trade, consistently under 15 per cent. Dependence on developed countries Heavy export reliance on fuels and minerals

Challenges of intra-African trade Highlights

African countries desirous to encourage trade among themselves; However, on the whole, with a few exceptions, not much progress has been made on intra-African trade; Challenges of intra-African trade

Nature of African economies /Supply side Inadequate trade related infrastructure Trade facilitation challenges Challenges of intra-African trade

Informal Sector trade in Africa: Some basic facts Mainly unregistered trade across borders based on popular demand and supply Often referred to as illicit trade or classified as smugglers Participants and beneficiaries are usually people and communities along border lines and adjacent areas It terms of gender, it includes both female and men of all ages Large numbers of women are often observed transporting goods on their backs and heads across borders Such unregistered trade is often not reported in national accounts and does not pay tax Goods traded “informally” once in the country sometimes find themselves in licensed/registered shops by registered traders Goods traded include agricultural products, clothing, shoes, electronics Informal sector traders are often subjected to harassment by customs officers and police, and seizure of goods Financing of informal trade is mostly through own savings and credits from friends and relatives as bank loans are not easily accessible to small traders.

Informal sector trade (Basic Facts contd) Century-old practice People and communities of regions want to interact and trade without governmental interference or requirement for formal registration for such trade Informal trade sustains livelihoods and meets basic needs Failure of state in fulfilling the needs of the poor and border communities compels informal trade Long distances from national central markets Alternate market outlets for better prices Avoidance of heavy taxes, customs duties, levies and other charges including solicitation of bribery by Government officials Avoidance of stoppages and searches at several road blocs that may involve unloading and loading even of people, causing waste of time.

Magnitudes of informal sector trade: Difficult to give exact magnitudes because of its unrecorded nature Available data mostly based on sample case studies & estimates from particular short periods, and thus the picture is mostly incomplete. Some estimates suggest that the value of unrecorded/informal exports could be as high as 25% of total formal exports. (e.g. Informal cross-border trade survey report by Uganda Bureau of Statistics, June Informal sector trade (contd)

Lessons Lower customs duties and taxes on essential commodities Improve customs procedures and remove non- tariff barriers Systematically include issue of informal trade in bilateral and multilateral trade discussions/forums in RECs Bring socio-economic development to border areas and rural communities Remove frequent road blocs

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