Africa faces major hurdles to full intra-continental trade

Tlotlo Mbazo - BG reporter
Wednesday, 14 August 2019
Magang Magang

It might take a while before intra-Africa trade and regional integration become enablers for sustainable development on the continent, panelists at the Global Expo Botswana 2019 concurred.

Former cabinet minister and estate mogul David Magang said the reason for creating regional economic blocs in southern, eastern, western and north Africa in the first place was to promote integration first within the regions themselves. He acknowledged however, that there has been very little integration with other regions as a result of major problems.  For example, channels of communications are still closed, access to the northern or central African countries appear to be a hindrance to intra-African trade he said. Economic imbalances between countries are also a major challenge, according to Magang. Consequently, because of the imbalance in economic development, countries tend to be more protective of what they have, and their people in terms of opportunities like employment.
According to Magang, this has prevented individual countries from seeing beyond borders as to what they can do and achieve collaboratively as a continent. 

“It is so amazing that most of Africa still trades with European countries or America when in fact there is room to trade within Africa, which is a major emerging continent,” Magang said in a panel discussion at the Global Expo Botswana 2019 that sought to bring to the fore challenges that hinder economic success to individual African countries as well as the continent as a whole. Another challenge is the development of relevant skills that could support economic growth. As a result, the intra-continental trade is hampered because no one knows what is happening in the next country in terms of booming markets and skills needed to support those markets.

“We are still attached to our colonial masters and consequently the trade is between us and our masters,” said Magang emphasising the need to open up channels of communication. “For example, Botswana is so close to Angola, but it is not easy to get to Angola even from the Okavango, which is actually geographically next to Angola. You will have to go through Namibia or Zambia. These are hurdles to break down for easy interaction and integration.” Another threat to intra-Africa trade and regional integration, according to Magang is that many countries are not willing to open up their borders or markets only to be swamped by other members from the region. 

“For example, during the difficult economic conditions of neighbouring Zimbabwe, many Zimbabweans that were trained at both higher and lower levels flooded into several southern African countries.  Many were so quick to protect their countries and their people,” Magang said.  In addition to the challenges that the continent faces, former President Festus Mogae believes that African countries need to introspect and examine imports and exports into and from individual countries and find out why they cannot be restricted within the continent. This he says would heighten intra-trade within Africa, rather than having some African countries still trading heavily with European countries.

“The AU has to consistently monitor these at a higher level and sponsor research and development that should inform trade decisions that are taken by individual countries,” Mogae said, adding that individual countries should also take keen interest in exploring opportunities of trade with other African countries. President Mokgweetsi Masisi said when opening the Global Expo on Monday that in an endeavour to integrate into the global economy, Botswana continues to reposition herself in her trade linkages with the largest emerging markets in Africa including; Kenya, Egypt, Nigeria and South Africa.  Botswana has signed the Southern African Development Community (SADC), the East African Community (EAC) and the Common Market for East and Southern Africa (COMESA) Tripartite Agreement as well as the recently launched African Continental Free Trade Agreement (AfCFTA) which is expected to go a long way in changing the landscape of business in Africa. 

“In order to realise the benefits from these agreements and achieve accelerated growth, Botswana’s industrial Development agenda presents an opportunity for integration into regional and global value chains within these emerging markets,” Masisi said  The big question remains, however, what role can the newly-ratified AfCFTA play to address the opportunities and challenges of generating inclusive growth, particularly for Botswana and other developing countries in Africa? This agreement covers a market of close to 1.2 billion people and a gross domestic product (GDP) of $2.5 trillion, across all 55-member states of the African Union. Masisi said at the Global Expo Botswana 2019 that was held under the theme, ‘Harnessing the Power of Emerging Markets for Economic Growth,’ that Botswana needs to adapt to the global reorientation of power, culture, and ways of doing business and leverage on the opportunities available in emerging markets such as China, India, Brazil, Russia and South Africa.

“Botswana businesses should engage with large firms within these emerging markets to tap into their domestic supply chain, explore opportunities for future trade agreements, as well as to understand these markets.”Former president, Festus Mogae on the other hand is worried that often times countries sign protocols and agreements that end up not serving their own interests.  He believes that having signed protocols and agreements, individual countries need to continue to study the feasibility and constraints to what countries have agreed to rather than just sign when aware of constraints of implementation and doing nothing about them.

“It seems to me that we generate ideas and ideals that we don’t follow up on, we make decisions that we don’t follow up on, but we need to identify constraints and explain to each other why certain things are difficult to implement,” Mogae said. Mogae said that individual countries do not make an effort either before or after signing protocols and agreements to explain to their populations the significance of these instruments. “Failure to do so results in our inability to implement,” he said, adding, “we need to do more to engage with our populations and explain to them the need for increased integration in the region; economically, socially and politically. In addition try and answer the questions or objections they might raise.”

Magang added that the reality is that although engagements might be carried out with populations, it might not be to a satisfactory level. His view is that having signed international agreements, countries need to domesticate them for easy implementation.
“The assumption is that ministers responsible would take it before parliament and parliamentarians would ultimately take it to the people,” Magang said.

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