14 January 2013

Africa: Regional Trade Can Power Africa's Growth


Washington — Expanded regional agricultural trade has the potential to power Africa's economic growth and food security, says a senior official with the U.S. Agency for International Development.

Through its three African regional trade hubs, USAID coordinates with African-led bodies such as the African Union and the Southern African Development Community to facilitate cross-border trade and to attract foreign investment, Todd Amani said at a January 9 forum on removing trade barriers in Africa.The forum was held at the Woodrow Wilson Center in Washington, a research institute named for the 28th U.S. president. Amani is USAID deputy assistant administrator for Africa.

Amani said USAID's efforts have advanced cross-border integration and boosted trade. The Organisation for Economic Co-operation and Development and the World Trade Organization have called USAID's efforts to develop and implement customs procedures and technologies in Africa successful, he said.

Amani cited the Southern Africa Trade Hub's efforts to extend border post operating hours along the Trans-Kalahari trade route linking Namibia, Botswana and South Africa. The hub helped the countries implement a performance management system that has "contributed to a twelvefold increase in usage of the corridor and reduction in travel time from 72 to 48 hours," he said. The Southern Africa Trade Hub is based in Gaborone, Botswana.

"These advances have reduced the time, costs and red tape associated with trading in Africa," he added.

Highlighting another example, Amani explained that USAID's support for customs reform in East Africa led to a new common customs software platform that allows officials along the Mombasa-Kigali trade route to more easily communicate shipment information to each other. That reduced the time it takes to transport goods along the corridor and reduced transport costs, he said.

Amani pointed to the New Alliance for Food Security and Nutrition that President Obama announced in May 2012. The alliance is a joint commitment by the Group of Eight developed nations, African countries and private-sector partners to lift 50 million people out of poverty over 10 years through inclusive and sustained agricultural growth "with commitments to policy reforms as the centerpiece," Amani said.

At the forum, Makhtar Diop, World Bank vice president for Africa, called on African countries to do even more to reduce trade barriers so food can get to more people at prices they can afford. He said policies to remove barriers to seed and fertilizer imports would allow farmers to get the inputs they need to produce more. He also called for countries to adopt uniform quality standards for seeds and fertilizers. That would allow farmers in a region to build bulk demand for those inputs, which would result in lower prices.

Diop encouraged governments to provide incentives for farmers to invest more in improved seeds and fertilizer that would enable them to produce more. He noted that trade barrier reform should include provisions that would make crossing borders safer for women.

He said the removal of trade barriers is becoming more urgent for Africa as its population and demand for food staples continue to rise. In addition, more people are moving to cities and need food grown in rural areas. He cited estimates that by 2020, the number of people living in Africa's urban areas will more than double.

He said that "with the right polices" Africa can produce more and better handle shocks that have typically led to shortages and spikes in prices. That includes abolishing bans on food exports, he said.

He said African countries' policies need to be predictable to attract needed foreign investments in irrigation systems and port, transportation and storage facilities. He also said there is a need for more commodity exchange boards like the one in Ethiopia so farmers can access accurate price information.

"Africans can feed Africa," Diop said.

USAID's other regional trade hubs are the East Africa Competitiveness and Trade Expansion Program, based in Nairobi, Kenya, and the West Africa Trade Hub, based in Accra, Ghana, with a satellite office in Dakar, Senegal.

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