Access to information across African economies, which has been hindered by the fragmented nature of the respective markets, is currently threatening a $400 billion intra-Africa trade potential.
Africa Export-Import Bank (Afreximbank) said the present transactions value at $170 billion remained their due to wide gap in market information, which now needs to be closed to foster accelerated trade integration.
Meanwhile, the size of intra-African trade could be doubled from the current level of about $170 billion per year to almost $400 billion by addressing the issue of availability of market information on the continent.
In a note at the weekend, the President of Afreximbank, Dr. Benedict Oramah, while meeting with the Advisory Group on Trade Finance and Export Development in Africa, said the potential is high to reach the $400 billion mark. He added that lack of knowledge of the continent and limited access to trade information among African businesses constituted major constraints to cross-border trade.
Already, a study on the regional value chains for leather and leather products, jointly commissioned by Afreximbank, UNCTAD and the Commonwealth Secretariat, found that Australia was the main source of tanned hides and skins for Southern Africa, including South Africa. Although Zambia exported the same products at lower costs, its exports were higher than South Africa's imports.
The report said South Africa imported leather that had been further prepared after tanning from India at double the price at which Ethiopia exported such leather, while Mauritius and Nigeria imported leather products from Italy and Belgium at much higher costs than what South Africa and Botswana exported them for.
Kenya imported raw hides from New Zealand, while Burundi exported the same product to the world at a much lower price and West African countries, on average, imported meats worth more than $3 billion per annum from Argentina and Australia even though Mali, Chad, and Sudan could supply all the meats required by the region.
Oramah argued that if Europe, with a population of 550 million people in 28 countries and a land area of 10.2 million square kilometres, could have intra-Europe trade of about $6 trillion. It was possible for Africa, which has double that population, nearly double the number of countries, and three times the land size, to achieve the same level, if not multiples, of such trade.
The Minister of Finance of Rwanda, Claver Gatete, therefore, called for increased effort to achieve economic integration in Africa, as a way of ensuring the continent's development.