africa

Africa Intra-continental Trade: SA exporters must be supported now


KwaZulu-Natal’s (KZN) small businesses must be supported to take advantage of The African Continental Free Trade Area agreement (AfCFTA)  by helping them to grow exports and beneficiate raw materials to grow intra-continental trade.

This was the message from CEO of Trade and Investment KZN Neville Matjie to delegates at the launch of KZN’s Africa Export Opportunities seminar held in Durban on Tuesday. 

“Intra- Africa trade helps grow economies, creates jobs and reduces poverty,” Matjie said.

However, he said the according to statistics released by the World Trade Organisation a comparative analysis showed that intra-Africa trade was currently just 18%, compared to intra-Asian trade at 52%; intra-North America trade at 50% and intra-EU trade at 70%.  The aim of the AfCFTA is to remove tariff trade barriers as well as non-trade barriers to rapidly grow the level of trade between African countries.

Matjies said trade diversification of exports was important because it allowed countries to build resilience to movements in demand due to economic downturns in importing countries and price dips. 

“In the case of commodity exporting countries, it supports a shift from an over dependence on commodities to higher value-added products and services,” he said.

“Economic diversification allows for more inclusion of small and medium sized enterprises and helps encourage innovation as more markets open and an increase in productivity  due to the need to compete. SA needs to move away from exporting raw materials for beneficiation and then buying them back at higher prices,” he said.

KZN EDTEA MEC Ravi Pillay said that Africa represented 17% of the global population but only contributed 2% to global manufacturing while its share of global trade stood at 3%. 

“This confirms the fact that our pattern of production and trade still subscribes to the template set long ago where we remain largely exporters of raw materials and importers of value-added products.

Numerous challenges must be overcome in order to make the AFCTA a reality. Possibly the first challenge that needs solving to enable intra-African free trade across the continent regards an urgent improvement in payments,” he said. 

“We must further develop financial platforms and mobile telephony, allowing money to flow digitally a lot smoother and a lot quicker.  It cannot continue to be the case that it is easier to buy something off a platform such as Amazon, than it is to buy something from another African country,” Pillay said.

SA Ambassador to Egypt Ntsiki Mashimbye said that Africa’s population was set to double to two billion people and most citizens would be youth below the age of 18 which was a demographic advantage.

“The most urgent and challenging tasks for us today is to create opportunities for them. We need to unleash economic growth and to do that we need to create jobs,” he said.

He said Egypt’s “keenness” to strengthen its trade ties with SA was encouraging and a significant advantage for local businesses. 

KZN Economic Development, Tourism and Environmental Affairs Deputy Director General, Sihle Mkhize, said the continent hd to deal with rampant corruption.

“We really have to do away with bribery to call a spade a spade. People have to pay a lot to move their goods.  We need to do away with trend where countries come and invest in infrastructure between the raw materials and the port and then export them therefore we need to make sure we beneficiate  them. We need to develop exports into the continent,” he said.

He said SMMES needed to be supported to grow intra-continental exports.

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