How information gap will grow Intra-African Trade by $270bn-Afreximbank

President of the African Export-Import Bank (Afreximbank), Dr. Benedict Oramah, has said the size of intra-African trade could be doubled from the current level of about $170 billion per year to almost $400 billion by addressing the issue of availability of market information on the continent.

The Afreximbank boss, disclosed this at the bank Advisory Group on Trade Finance and Export Development in Africa, held recently in Kigali, that lack of knowledge of the continent and limited access to trade information among African businesses constituted major constraints to cross-border trade.

He cited a study on the regional value chains for leather and leather products, jointly commissioned by Afreximbank, UNCTAD and the Commonwealth Secretariat, which found that Australia was the main source of tanned hides and skins for Southern Africa, including South Africa, even though Zambia exported the same products at lower costs; and its exports were higher than South Africa’s imports.

The report also showed that South Africa imported leather that had been further prepared after tanning from India at double the price at which Ethiopia exported such leather, while Mauritius and Nigeria imported leather products from Italy and Belgium at much higher costs than what South Africa and Botswana exported them for.

“In the same way, Kenya imported raw hides from New Zealand while Burundi exported the same product to the world at a much lower price and West African countries, on average, imported meats worth more than $3 billion per annum from Argentina and Australia even though Mali, Chad and Sudan could supply all the meats required by the region”, he added.

The President argued that if Europe, with a population of 550 million people in 28 countries and a land area of 10.2 million square kilometres, could have intra-Europe trade of about $6 trillion, it was possible for Africa, which has double that population, nearly double the number of countries and three times the land size, to achieve the same level, if not multiples, of such trade.

In his contribution, Claver Gatete, Minister of Finance of Rwanda, called for increased effort to achieve economic integration in Africa as a way of ensuring the continent’s development.

The meeting also featured the launch of the 2017 Africa Trade Report, an Afreximbank annual flagship publication, by President Oramah.

The AGM Activities, which ended on 1 July, began on 28 June with two days of seminars and it included an investment forum, hosted by the Rwandese Government, and a trade exhibition, which also took place on 30 June, before the formal AGM on 1 July. The activities concluded with a conversation session with President Paul Kagame of Rwanda.

Meanwhile, to build robust domestic and continental supply chains and facilitate seamless flow of goods and services across Africa’s borders, the African Export-Import Bank (Afreximbank) is introducing a programme to support companies with proven intra-African trade experience and operations and with value chains spanning across countries.

Dr. Oramah said the unique group of African companies, which have been branded Intra-African Trade Champions or Intra-Champs, would receive interventions from Afreximbank that would include financing, enabling of market access and technical assistance initiatives.

Also, in her address, Managing Director of Afreximbank’s Intra-African Trade Initiative, Kanayo Awani, highlighted the impact of multinational corporations in developed and developing economies and outlined facts about the performance of African multinational corporations, saying that those fortified the belief that the strategy for Africa’s transformation should be anchored by the continent’s “regional champions”.

She noted that African multinational corporations, such as the Dangote Group, Export Trading Group, El Sewedy and MTN, had been increasingly investing across borders and contributing to growth in intra-regional investment flows. Such flows averaged about 24 per cent of total foreign direct investment flows in Africa and were creating an important source of capital formation for some African economies.

In his contribution, former Nigerian President Olusegun Obasanjo, who was a special guest at the roundtable, spoke of the need for African countries to encourage the emergence of strong companies that could compete effectively on the global scene.

He noted that, as President of Nigeria, he implemented policies to encourage the emergence of such companies, some of which had gone on to become multinational in their operations.