THE United Nations Conference on Trade and Development (UNCTAD) has advised African countries to formulate measures which promote trade as intra-regional commerce continues to tumble.
Report by Tarisai Mandizha
According to the UNCTAD Economic Development in Africa Report 2013 launched yesterday under the theme Unlocking Private Sector Dynamism, trade within the region dropped to 11,3% in 2011 down from 22,4% in 1997 due to a myriad of challenges confronting
This means that the region could be heavily dependent on other regions.
“UNCTAD urges African government to follow up laudable strategies to expand intra-regional trade, noting that trends have been running the other way,” UNCTAD said in the report “Even accounting for significant informal cross-border trade that isn’t captured by statistics, that percentage is well below other regions such as Asia, where the average share of intra-regional exports in total from 2007 through 2011 was 50% and Europe where it was 70%,” it further read.
The UN agency said Africa should produce value-added products to improve on trade figures as unprocessed natural resources continued to drive away export earnings.
Experts say Zimbabwe has a huge trade imbalance due to a weakening manufacturing sector and limited value addition of mineral exports.
“African governments strengthen the private sector by making finance more accessible and less costly, and by enhancing mechanisms for government consultation with the private sector,” the report read.
The report further noted that unlocking the trade potential of the private sector required the distinctive features of Africa’s enterprise structure that inhibit regional trade to be addressed.
“That involves measures such as upgrading infrastructure, improving the skills of domestic workforces, encouraging and enabling entrepreneurship and increasing the size of existing manufacturing firms so that they can satisfy larger markets and produce their goods with greater economies of scale,” the report said.
It, however, indicated that there was also need to create mechanisms for constant dialogue between states and the private sector so that the problems and challenges faced by existing and prospective businesses are clear to governments and well-coordinated plans can
“There are currently more than 20 corridors in operation in Africa, but most tend to be traditional transport corridors.
There is a need to go beyond that and to create industrial development corridors as well.”