Why Intra Africa Trade matters
madagascar
not the movie but the country
madagascar is a an island of the east
coast
of the african continent it’s
interesting to note that this country
features
in our daily lives and most of us are
not conscious
of that many of us in this room are
wearing perfume
many of us in this room may have shared
birthday cakes with loved ones
many of us in this room may have had
a nice scoop of ice cream on a hot
summer’s day
or lit a fragrant candle during your me
time
as you relax in all those moments
madagascar has been present
and the way madagascar has been present
in those moments
is through its key commodity export
vanilla the vanilla pod
you see madagascar as a country
supplies 80 percent of global vanilla
requirements of all the vanilla that is
consumed in the world
eight zero eighty percent of it
originates
from madagascar so madagascar is quite
key to industries
that require this commodity
however what is curious is that
madagascar exports the majority
if not all of the vanilla pods
that it grows all the way to europe
the pods are exported to europe when
they get there
they are further processed and they are
then integrated
into different industries the perfume
industry
the confectionary industry and the like
these products then find their way back
to the african continent and we buy them
at a premium
because they’ve got higher value that
has been added to them
and this madagascar vanilla story
is the quintessential story of the manna
in which
the african continent trades with the
world
i can give you many examples i can give
you an example
of copper from zambia
that will be exported to china and come
back
to the continent in the form of copper
cables and copper wire
and we buy it at a premium
i can give you an example of the cocoa
from west africa
cote d’ivoire ghana that will be
exported to europe
and come back to the continent and we
buy it as delicious belgian chocolate
this is the story of the african
trade interface
i want us to begin to get
to the grips with the reason why
our structure of trade as a continent is
the way it is it’s been mentioned
previously that
the level of trade within the african
continent is very low
16 percent if we compare this level of
in trafficker trade to
for example how europe traded itself
sixty percent of european trade happens
amongst european countries six zero
sixty percent forty percent
of trade in north america happens
amongst the north american countries
similarly with asean it’s over 30
percent
so there’s a lot of room for growth in
this space
and there’s an urgency that africa needs
to begin to trade more with itself
precisely because of the value and the
benefit that trade brings
to economic prosperity if our continent
is going to grow
if we’re going to create the jobs that
we need to create particularly
as part of our post-covert
reconstruction we have
to make sure that we use trade as a key
instrument for transformation of the
african economy
madagascar still remains one of the
poorest
countries in the world
this country that exports 80 percent of
vanilla to the world
still has a per capita income of 1
700 u.s dollars compare that
to u.s per capita income of 63 000
compare that to even south africa of 13
000
that means that this profile of africa
of continuing to trade with the rest of
the world
sending primary commodities whether
they’re agricultural or mineral
and buying back value-added commodities
is keeping us in the perpetual poverty
cycle
and this is an issue that we need to
confront
and to address as african economies
why is the african trade profile like
this
it’s important that we embed our current
trade profile as a continent in our
history
because we would be remiss if we do not
acknowledge the fact that we are still
perpetuating
colonial patterns of production
colonial patterns of consumption and
colonial patterns of distribution
on this continent
in the 1800s when colonial
masters from different parts of the
world
europe and everywhere else landed on the
african continent
it was part of of course the extension
of the imperialist agenda
but the priority was one and one alone
to exploit africa’s natural and human
resources
for the betterment and the growth of
countries outside
of the continent and that’s exactly how
then the trade profile of africa
was set up it was about extracting
natural resources
and sending them to other countries to
help
with their development and
industrialization
it’s a pity that we still have somewhat
a similar profile that we’ve had
since the colonial times and that is why
it becomes urgent that we address
this fundamental challenge the
fundamental challenge of reversing
the colonial patterns of production
consumption
and distribution on the african
continent
one of the key things that we need to
look at when it comes to production
is the fact that we as africa we
represent
seventeen percent of the global
population
but we only contribute two percent to
global manufacturing
and we only have a share of three
percent of global trade
this confirms the fact that our pattern
of production
is still very much in the manner in
which it was set
a long time ago we remain still
largely exporters of raw materials
and we still remain importers
of value-added products let’s look at
our patterns of consumption
similarly there’s still a fundamental
preference
for products that are coming from
outside of the continent this is
reflected in the fact that we are not
trading too much with one another
eighty-four percent of our trade is with
the rest of the world
even if we move beyond the trade realm
levels of intra-african investments
themselves leave a lot
to be desired then we go to our
distribution patterns all you need to do
is to take a bird’s-eye view
at the infrastructure map of the african
continent and you’ll begin to see that
our
infrastructure is still structured in a
way
that it leads from a natural resource
point out
to the nearest exit port
even today it’s a very
extractive plan of infrastructure
there’s very little infrastructure that
connects
different african countries and
functional viable infrastructure that
does the same
if for example you’ve got a rail line
that moves from one country to another
that could possibly facilitate trade
you then are confronted with issues of
gauges
that the gauges don’t match so the
interconnectivity is interrupted
some of the roles are overburdened so
even in terms of our own infrastructure
planning there’s still a lot
to be done to make sure that we have
cross-border infrastructure
that we start to build and to create on
the african continent
what are the implications of
all of this to us
if we continue to not focus on adding
value to our primary commodities
we are costing ourselves as africans
critical jobs
we’re costing ourselves critical skills
we’re costing ourselves
an ability to move up the value chain
and become a viable
player in the global economy
we cannot even begin to start talking
about participation of africa in the
fourth industrial
revolution if we are still struggling
with the second
industrial revolution matters
it is therefore very urgent that
all of us as the african citizenry begin
to address
the issue and redress
and and correct the colonial patterns
of production consumption and
distribution
on the african continent
now how can we work together
as governments as
citizens as the global community even
to address this matter and to contribute
to increasing
our levels of inter-africa trade
our african leaders african union
leaders will be holding
an extraordinary summit on the 5th of
december
this year in about two weeks time
and the priority of that summit will be
to look at how
we activate our continental
free trade agreement
it’s going to be quite a seminal
conversation it’s going to be quite a
seminal summit
that our leaders are going to have
because there has been a recognition
that indeed inter-africa trade is
important
and in the form of the continental free
trade agreement
we have begun as africa
after many many years to really put
and activate our into africa trade
agenda
the vision is that this inter-africa
trade
agreement continental fta
will begin to operate on the 1st of
january 2021
but i must mention that the continental
free trade agreement
at this point we’ll mainly focus on
addressing the issue of tariffs
to simplify taxes that we we we pay
when we trade amongst ourselves
that goes a long way of course in
facilitating our trade
but we still need to go deeper
if we’re going to improve our levels of
trade on the continent
we have to prioritize the issue of
infrastructure development
on the continent and i my
my urge is that when the leaders of
africa meet
in december the priority
focus is how do we begin
to create an infrastructure build on the
continent
that is cross-border in in nature
because the only way that we can begin
to facilitate trade on this continent is
if we have the right infrastructure
that joins the countries
and it’s not just about the extractive
infrastructure build so i encourage that
our leaders take a firm decision
on this matter because many many african
countries as we speak
have infrastructure plans for themselves
as part of recovery and economic
stimulus post but the question is
are the countries talking to one another
so that whatever infrastructure plan and
build
stimulates trade and is not just ins
isolated to to one country
so it’s important that our leaders begin
to have these conversations
because cross-border infrastructure will
also force us to deal
with functionality of borders themselves
so that the transit of people movement
of goods
at the borders the the the regulatory
requirements that we have we begin to
look at them strategically
and cooperatively
and it will take us having a
cross-border infrastructure plan for
africa
to get to deal with all those issues
on the issue of reversing the colonial
consumption patterns
i think it behooves us as african
citizens
to begin to demand african-made products
this preference as well for external
products
and not encouraging enough industries
and not encouraging enough african
industries
and consuming african products it’s also
not
very helpful because trade happens where
there is demand
and we need to be deliberate as africans
in so far as
they demand
finally the on the issue as well of
production one of the key areas that we
need to look at as africans
and also as a global community
is the issue of facilitating
intra-african investment
particularly in the productive sectors
africans need to begin to invest in each
other’s economies
so that we can raise the levels of
production
and begin to produce product that we can
trade amongst ourselves
it’s one thing to have frameworks that
facilitate trade among ourselves
it’s one thing to build the
infrastructure that facilitates
trade among ourselves but if we do not
produce
and if we’re not deliberate about the
facilitation of investments that are
going to make sure that we produce
again that is not going to help us to
reverse
our current situation
so the call to action really to the
african diaspora
to african consumers to african private
sector
is to look at ways that we can aggregate
intra-african investments to look at
ways that we can
raise the level of production on this
continent
so in conclusion i think all of us need
to internalize the fact that
it is our responsibility to reverse
these patterns
of production consumption and
distribution
on the continent that we inherited from
colonial times
and each of us have a role to play
be it investments be it how we consume
be it decisions and infrastructure
planning and
integration planning that we take at
political level
we all need to work together to make
sure that this works
we all need to make sure that the
intra-africa trade
agreement the cfta
is a functional agreement and we all
have to make sure that we protect it
in any way that we can because in
intra-africa trade matters thank you
you