Africa’s trade performance remains below potential – Report
Trade performance in Africa is said to be below potential, according to a new report by the Economic Commission for Africa (ECA) and the African Union (AU).
The report titled “Economic Report on Africa 2011,” said there is the need to continue diversifying production and exports.
“Diversification requires improvement of competitiveness by tackling supply-side constraints as well as improving infrastructure and productive capacities, among other things”, the report said.
According to the report, in order for Africa to realize its full trade potential, the onus remains on developed countries to show leadership towards rapidly concluding the Doha Round.
The Doha Round is a round table discussion between the developed and developing countries which allows the developed countries to open up their markets for trade and live up to their promise to developing countries.
“This will not only give to Africa market-access opportunities but, if the flexibilities that the continent is seeking are granted as part of the development package, its nascent gains from diversification could be consolidated”, the report added.
The report also noted the role of the state as facilitator of the trade on the continent.
It said even though African countries have demonstrated the political will to realize the full benefits of regional integration, an acceleration of harmonization efforts, such as “the tripartite Common Market for East and Southern Africa-East African Community-Southern African Development Community (COMESA-EAC-SADC) agreement or, better still, fast tracking the Africa-wide Free Trade Agreement or Free Trade Area (FTA), could enhance the benefits already being realized through regional integration.”
Governments should aim at transforming the tax structure, that is, close exemptions and loopholes, widen the tax base, and consider introducing property taxes, the report said.
The report therefore urged African countries to increase their voices in international economic governance and play a part in reforming the global financial architecture.
By Ekow Quandzie