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African Trade Forum

Excellencies, Distinguished Guests, Ladies and Gentlemen,

Welcome to Addis Ababa for the inaugural Africa Trade Forum. We are meeting during a period in which there is near unanimity about Africa’s positive growth story. We now have a situation in which the very same sources that depicted Africa as a hopeless case barely ten years ago are now acknowledging that it can be the next global growth pole. For this to happen however and as we know from historical and contemporary evidence, trade has a major role to play in this regard. Indeed it has to able at the heart of our developmental strategies.

It is against this background that you will be examining various dimensions of trade and development over the next three days and so bearing this in mind, and in order to provide a context for your discussions, I will focus my remarks on Africa’s trade performance at the international and regional levels. The continent’s share of global trade remains low at about 3% and continues to be dominated by primary commodity exports. Rapid growth in emerging economies has increased demand for such products to the extent that price effects rather than a supply response accounts for two thirds of the increase in African export values.

There are several reasons why this situation is a cause for concern. Since most of the change in export values is coming from price effects it is evident that our continent has not taken full advantage of the situation to increase its productive base. Moreover, Africa cannot continue to depend on commodity demand from emerging economies to drive its growth as there are risks of vulnerability to external shocks and price volatility involved. Indeed, we must also be worried that it might be financial investments in commodities that are contributing to high prices. Of course, the situation could be ameliorated by diversification of Africa’s productive base and while there are positive developments in this regard, which I will mention later, the situation is not helped by the lack of progress in the Doha Round of trade negotiations. To benefit fully from trade, Africa needs a development friendly international trade regime.

This brings me to the issue of how we are faring in intra-Africa trade. Here again there is much that can be done to reap gains from trade. With intra-Africa trade at just about 11% of total trade as compared to 72% in Europe and 52% in Asia, it is evident that there is a lot to scope for expansion in regional trade. One way of bringing this about is through regional value chains which have contributed to high intra-regional trade elsewhere, which in turn has helped firms in other parts of the world to be key players in global value chains. Africa must perforce explore and utilize the benefits of regional value chains starting with the important agro-processing sector.

There is however cause for us to be more upbeat about Africa’s trade prospects if we look at developments at the sub-regional and national levels.

Recent analysis in the forthcoming Economic Report on Africa 2012 shows that some regional economic communities have exceeded the average intra-African trade growth. Intra-COMESA trade offers one such example growing by at least 35.4 per cent between 2009 and 2010, rising from US$12.7 billion to $17.2 billion. Moreover, in some 19 African countries, average exports to other African countries between 1995 and 2008 counted for up to between 20% and 71% of total exports. Further analysis showed that most of such intra-African trade is in manufactured goods, although not in the context of regional value chains.

Given the picture I have painted above, you will concur in the importance of this inaugural African Trade Forum which provides us with an opportunity to build on the success stories in intra-African trade in spite of various constraints. This Forum is intended to deepen the dialogue on how these challenges can be best addressed including through sharing of best practices. Our leaders are showing the way in this regard as the Heads of States and Governments from the Tripartite of COMESA, EAC and SADC have already committed themselves to realizing by 2014 an FTA that will be based not just on market integration, but that will seek shared benefits through industrialization and infrastructure development.

In similar vein, the AU Assembly will in January next year focus on boosting intra-African trade and we hope that this Forum will contribute to the process of helping to build consensus around some of key areas. African Ministers of Trade have already proposed that one way of boosting intra-Africa trade is to accelerate the process of establishing a Continental Free Trade Area. Indicative figures in the forthcoming Assessing Regional Integration in Africa V, a publication we jointly produce with the African Union Commission and African Development Bank suggest that harmonization of RECs trade policies through a continental FTA would result to an additional US$34 billion in intra-African exports, just from eliminating current intra- and inter-RECs tariffs. But when the non-tariff barriers are also tackled through improved trade facilitation, intra-African trade could rise to about 22% in the next 10 years, all of which goes to show that if we do what is required, we can optimize intra-African trade.

Let me conclude by saying that we at the ECA are very excited by Africa’s trade prospects and will accordingly continue to invest our resources to scale up the trade and integration agenda in the continent working very closely with the African Union Commission, the African Development Bank and the regional economic communities. Let me take this opportunity to again appreciate the support that the Government of Canada, through CIDA, is giving to our flagship African Trade Policy Centre (ATPC) and we are pleased that the UK and Swedish Governments have also extended support to ATPC, as further demonstration of their engagement with Africa on trade and regional integration. However, our efforts and those of our partners cannot succeed without the active belief by you the stakeholders in the potential contribution of trade and regional integration to Africa’s development. This is really the moment for Africa which we must seize upon until our objectives are achieved.

I wish you a successful Forum.


Voir en ligne : Opening Remarks by Mr. Abdoulie Janneh, UN Under-Secretary-General and Executive Secretary of ECA

Publié le 22 novembre 2011