AU hopes to improve intra-African trade

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Wongai Zhangazha

ZIMBABWEANS does not need an introduction to intra-trade on the continent as informal merchants form a significant proportion of their country’s importers and exporters.

 

Everyday, informal traders leave Zimbabwe heading in virtually all directions — to Zambia, South Africa, Botswana, Mozambique, and as far as Angola, Namibia and Tanzania.

 
They go to the regional countries to sell wooden crafts and other artworks, and bring back clothes, blankets, shoes, electric gadgets and a wide range of household goods.

 
These merchants most of them women, are the face of intra-African trade that most people on the continent are familiar with.

 
The theme of the 19th African Union Summit that took place in Addis Ababa: “Boosting Intra African Trade,” sought to promote regional and continental economic growth.

 

 
The AU Economic Commission for Africa hopes that by harmonising trade policies at national, regional and continental levels, this will reduce poverty, create peace and foster economic development.

 
However, there are more economic and political issues that need to be addressed in order to promote continental goodwill towards intra-trade than meets the eye and this makes some member-states hesitant to adopt it.

 
There are some who feel that Africa’s integration model is not optimal because it has currency problems, its labour is divided and there are limitations on free movement. These, plus a lack of value-added manufactured products, have raised questions on whether the continent is ready for such a commitment.
After the 18th AU summit in January, President Robert Mugabe lamented that disparate economic structures and a low level of manufactured goods produced by African countries were inimical to intra-continental trade.

 
Statistics show that Africa’s share of global trade is only 3% and her intra trade stands at 12%, a far cry from Europe’s intra-trade that is at 60 to 70%.
AU Commission deputy chairperson Eramus Mwencha believes what is needed to promote African intra-trade is a change of mindset.

 
“If Africa can come together, we can support the motor industry, clothing industries, we should have the solidarity. Through intra trade we can expand investment, infrastructure and address poverty. It’s a mentality change that we need. Why is investment going to China, India, Europe and other countries outside Africa when there is a lot of potential trade on the continent?” Mwencha asked.

 
However, political scientist Leonard Makombe holds the view that intra-trade is not as easy as officials in the AU would want to put it, pointing out that the multiplicity of regional and sub-regional economic groups on the continent was indicative of this.

 
“We can look at the issue of the different customs unions, Comesa and Sacu (Southern African Customs Union) and how they are different; Sacu has one thing in terms of promoting intra-trade while Comesa has another.

 

 

“We also need to look at the currencies in use, how can we promote intra-trade without a single currency?” Makombe asks.

 
He believes the opening up of regional markets could create a “survival of the fittest” scenario where smaller economies would suffer. Already, South Africa is the big brother economy on the sub-continent. It mostly exports value-added products while the smaller economies exports to it unprocessed products as they have no capacity.

 
“We have no business to talk of in Zimbabwe with capacity utilisation below 60%. With intra-trade, we face stiff competition and we will suffer,” Makombe maintains.

 
It has been argued that free trade must of necessity include free movement of people. However, Mwencha is of the opinion that it is important to build confidence first before people could seriously talk about free movement.

 
“Let’s start trading, build the confidence and free momement will follow. With economic trading there is a process under which you move and we will build that gradually. Let’s not go for the bigger things and look at some issues that can be done immediately.

 
“The roadmap to boosting intra-African trade is a negotiated process. No one is forced but should be inspired by the vision. It will require political will and technical capacities plus the involvement of the private sector and civil society,” Mwencha said.

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