Boosting intra-African trade

Boosting intra-African trade has been the theme of the recent African Union Summit (Addis Ababa, 23-30 January 2012)

Current level of intra-African trade is at around 10% (by comparison, Intra-North American trade is about 48 %; intra-Europe is about 72 %; intra-Asia is about 52% and intra-Latin America is about 26% ). African countries maintain high tariff barriers to trade within the continent (9% as opposed to around 3% for abroad).

There is a general agreement on the fact that action needs to be taken to increase the current levels of intra- African trade, for the African countries to be less dependent on international shocks, for them to develop larger markets (economies of scale) and job creation.

However, the discussions between African heads of states showed that there is no widespread consensu on the commitment to fast track the creation of an African continental free trade area by 2017. The decision adopted by the Assembly confirmed 2017 as the indicative date for the establishment of a Continental Free Trade Area, but as a 'date open to review depending on progress'.

Countries such as Ethiopia and Nigeria expressed their reserves in the feasibility of meeting the 2017 the deadline, but agreed with the AUC that the main challenges to beovercome are a) development of infrastructure networks in Africa (within and inter-states), b) strengthening trade facilitation and c) increased access to trade finance.    These countries have strong industrial policies and plans to develop national manufacturing industries and are less keen on tariff liberalisation.

Especially the topic of infrastructure development was very high on the agenda of the summit. The Program for Infrastructure Development in Africa (PIDA), covering transport, energy, ICTs and trans-boundary water management  was adopted.

African Heads of States agreed on keeping 'boosting intra-African trade' as the theme also for the next summit in June in Malawi.