African countries asked to add value to primary products to gain competitive edge in global trade

African countries have been asked to add value to their primary products to gain a competitive edge in global trade. Africa’s share in the $30 trillion global trade is only 3%.

Speakers at the first Africa Trade Forum which opened in Addis Ababa, Ethiopia Tuesday November 22, 2011 said Africa cannot compete in global trade if the continent continues to export its primary products and does little to improve trade with each other.

Mr. Lamin Barrow, the Resident Representative of the African Development Bank said the theme for the Forum “Accelerating Intra-African Trade and Enhancing Africa’s Participation in Global Trade” is quite appropriate.

He said borne out by the Assessing Regional Integration in Africa, (ARIA IV), a key remaining challenge for regional integration in Africa is the low level of trade within Africa, “which has many and far reaching implications for sustained growth and poverty reduction.”

He indicated that stagnation of trade within Africa which is around 10% to 12% over the last decade, compares poorly with the levels achieved in other regions, which range from 72% in Europe, 52% in Asia, 48% in North America, 26% in Latin America and 16% in the Middle East.

He argued that “the fact that this relatively poor performance has prevailed over the last decade strongly suggests that inadequate attention has been focused on improving Africa’s competitiveness and participation in both the global and intra-African trade.”

According to Mr. Barrow, the unfolding events in the Euro Zone and other emerging threats (both perceived and real) that might lead to a global economic slowdown provide a compelling urgency for further reflection to shape a new vision of Africa’s economic diplomacy through enhanced intra-African trade and regional integration.

He said while Africa might not come under immediate threat from the direct consequences of these challenges, the continent’s reliance on primary commodity exports makes it impossible to escape the medium to long term impacts – ” the more reason we should boost intra-Africa trade,” he said.

He urged African countries to ensure that the cost of doing business on the continent is lowered substantially through commensurate investments

Some of the participants at the Forum

in regional and national infrastructure and improved policy harmonisation.

Opening the conference, the Ethiopian Minister of Industry, Mekonnen Manyazewal said while trade matters, and can work for Africa’s development and it is necessary, it is not sufficient. “Much more needs to happen for trade to serve as engine of growth and development.”

He said one of the challenges facing Africa more than other developing regions is the fact that “Africa is heavily dependent on primary commodities as a source of export earnings and it is not able to increase agricultural productivity.”

He said only few African countries have diversified in industrial export.

He called on African countries to pay attention to supply side constraints, enhancement of productive capacity through mobilizing of domestic private sector and foreign direct investment, investing in human resources, and improving infrastructure logistics.

“Without these,” he said, “trade cannot be good for growth and development.”

The conference will end on Thursday November 24, 2011.

By Emmanuel K. Dogbevi, in Addis Ababa, Ethiopia

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