Trucks transporting goods from Mombasa port to Uganda wait for clearance at Malaba border. PHOTO FILE | NATION
Bureaucracy has been singled out as a major contributor to the high cost of doing business in Africa.
For
instance, a container from South Africa takes three weeks, requires
five sets of invoices, 28 Southern Africa Development Community
certificates, 84 Customs stamps, 56 Customs signatures and 83 export
documents before it can enter Angola.
Speakers at the
annual general meeting of the African Export-Import Bank (Afreximbank)
in Kigali cited this and similar trade barriers by African countries as
the cause of the ever increasing cost of doing business on the
continent.
“There is a costly absence of trade
harmonisation in Africa; every country has its standards, non-tariff
barriers are still largely unaddressed and the economic blocs are not
helping a lot,” said Gwarega Mangozhe, chief executive of the Consumer
Goods Council of South Africa.
Speakers at the meeting
noted that many African countries are preoccupied with preserving their
sovereignty and not with trade fellow African countries.
“You
have to give up a lot of sovereignty if you want a lot of things to be
done on a broader and more sustainable front. The EU moves as a single
bloc regardless of the sovereign states involved,” said Gilberto De
Barros, senior private sector development specialist at the World Bank
Group.
He added that lack of commitment between
African countries in terms of trade facilitation is also witnessed in
how many give preference to foreign currencies like the euro and US
dollar which causes currency exchange constraints.
Intra-African
trade is viewed as a $6 trillion opportunity in the short-term, and $12
trillion in the long-term, but if countries don’t advance a holistic
trade harmonisation agenda, this potential WILL not be realised, she
said.
In 2014, African countries committed to tripling
the level of intra-African agricultural trade by 2025 and to fast track
the establishment of Continental Free Trade Area and adopting a
continent-wide Common External Tariff scheme, but nothing significant
has been achieved so far.
Intra-African
trade accounted for only 16 per cent, yet in 2014, the continent traded
of the total at an average of 61 per cent with Asia, 69 per cent with
Europe and 56 per cent with the US.
Reports indicate
that in the first quarter of 2017, China’s total trade with Africa rose
16.8 per cent to $38.8 billion, mainly due to a 46 per cent jump in
annual imports from Africa, with agricultural imports rising 18 per
cent.
The
World Trade Organisation is forecasting that global trade will expand
by 2.4 per cent in 2017, and between 2.1 per cent and 4 per cent in
2018. However, only a fraction of this growth is expected to come from
Africa.
Officials at the meeting also called upon
African leaders to address basic constraints such as free movement of
goods, people and labour.
Only 13 out of the 55
countries offer visa-free or visa-on-arrival to all Africans, while only
the Seychelles abolished visa requirements for Africans according to
the African visa openness report released last year.
“There
is power in a collective structure of operation, political leaders need
to be held accountable every year,” said Mr Mangozhe.
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