Fostering intra-African trade: Challenges and perspectives

By Maurice Okoli

Over the past few years, African Union, the continental organization, has made intra-African trade its newest flagship and has created the Intra-African Trade Fair (IATF), which provides a unique and valuable platform for potential investors to support the continent’s transformation through industrialisation and export development, for businesses to access adequate trade and market information, and operate in an integrated single African market of over 1.4 billion people with a combined gross domestic product of over $3.5 trillion under the African Continental Free Trade Area (AfCFTA).
Organized by the African Export-Import Bank (Afreximbank), in collaboration with the African Union and the Secretariat of the African Continental Free Trade Area (AfCFTA), it was the historic third edition of the IATF, held in Cairo, Egypt from November 9-15, 2023. Under the theme “The AfCFTA Marketplace” – it brought together high-powered government officials, ministers, representatives of central banks, regulatory bodies and agencies, legislative authorities, commercial banks, law firms, entrepreneurs, exporters from across Africa and beyond.
(i) Promoting Intra-African Trade: The IATF plays a crucial role in boosting trade among African countries. Intra-African trade is generally lower compared to other regions, and the fair aims to address this by creating a conducive environment for African businesses to trade with each other.
(ii) Market Access: It provides African businesses with access to a larger market within the continent. This enables companies to expand their customer base and increase sales, ultimately contributing to economic growth.
(iii) Facilitating Networking: The fair brings together a diverse range of businesses, government officials, investors, and trade experts. This facilitates networking and partnerships that can lead to collaborations and business growth.
(iv) Showcasing African Products and Services: African businesses have the opportunity to showcase their products and services to a wider audience. This not only helps in building brand recognition but also highlights the quality and diversity of goods and services produced on the continent.
(v) Attracting Investment: The IATF attracts domestic and foreign investors interested in African markets. This can lead to increased foreign direct investment (FDI), which can fuel economic development and job creation.
In addition to establishing business-to-business and business-to-government exchange platforms for business deals and advisory services. The conference ran alongside the exhibition and featured high-profile speakers and panellists addressing topical issues relating to trade, trade finance, payments, trade facilitation, trade-enabling infrastructure, trade standards, industrialization, regional value chains and investment.
It marks one more significant step forward towards achieving economic independence which seemingly eluded the continent since 1963, the year the African organization was established and later transformed into what is popularly referred to as the African Union (AU). As stipulated by the explicit guidelines, the AU oversees and monitors the entire aspects of multifaceted development across Africa.
The AU is a sought after platform for establishing mutual beneficial contacts and promoting bilateral relations for regional economic blocs, and dynamically developed regions such as Asia-Pacific, the United States and Canada to Latin America and Europe.
With the geopolitical changes and emerging multipolar political and economic order, Africa has become the main focal point in the world. In practical context, Africa forms one of the current global transformation at the intersection of the past and the future. At the same time, Africa has already recognized its past of the adverse impact of resource exploitation primarily due to former leaders’ weak policies. Now it has the opportunity to make a tectonic shift and get engaged in a more equitable integrated, multipolar world.
With vigour, Africa can continue pursuing an independent continental policy to improve its economic status, further strengthen its sovereignty with an increasing number of states in the Global South, and most probably in the East. Of course, it requires some unity in diversity in order to achieve this sustainable economic sovereignty.
The AU’s involvement in the IATF 2023 highlights its commitment to promoting economic cooperation and integration among African nations. By actively coordinating the trade fair, the AU aims to showcase Africa’s potential as a hub for intra-African trade and attract investments from both within and outside the continent.
The AU’s involvement in the IATF 2023 also signifies its recognition of the importance of regional economic integration in boosting Africa’s overall trade performance and fostering sustainable development across the continent. It can leverage its influence to facilitate discussions and negotiations on key trade, industry and tourism issues.
The vision for continental trade points to the creation of the powerful African Continental Free Trade Area (AfCFTA) in January 2021. Its primary purpose is to form a single market with a common umbrella – a borderless market allowing the free movement of goods, services and people. It is attracting external partners despite the persistent challenges and stumbling roadblocks (hurdles), the most tractable being the political disunity, divergent policies, ethnic conflicts and deep-seated corruption and lack of good all-inclusive governance.
That however, high optimism still exist. Most of the African countries are rallying around the historic decision, and frequently express the determination to join platforms, to develop targeted interactions within the framework of pan-Africanism. Several summits and conferences have been held to dialogue strategic partnerships relating to aspects of the continental economy.
Acknowledging the fact that attaining economic sovereignty includes thorough discussions on prospects for investment cooperation, industrial development, adopting new scientific technologies for modernizing agriculture and, of course, tourism and recreation for the 1.4 billion population in Africa.
In search for those aforementioned above necessitates the establishment of the Intra-African Trade Fair (IATF) and the African Continental Free Trade Area (AfCFTA). In one phrase – it remotely aims at strengthening continental industrial base and promote the value supply-chains across Africa. At this moment, it necessary to remind that global tensions are causing unprecedented fragmentation of trade, noting an uptick in unilateral trade restrictions and a growing trend towards consolidation of relationships within the processes of reconfiguration.
Therefore, the main challenging objective is how best to guide and better equip the private industrial and economic sectors with value chain integration strategies within the context of the AfCFTA. So we have to put emphasis on exploring the priority challenges confronting businesses and to identify targeted interventions that will support these businesses on their trading journeys in the AfCFTA.
Chief Olusegun Obasanjo, former President of Nigeria and Chairman of the IATF2023 Advisory Council, underscored the fact that intra-African trade holds the key to unlocking Africa’s true potential and fuelling economic growth, fostering industrialization and creating job opportunities for the people of the continent. “It is through this spirit of cooperation and collaboration that we will unlock the untapped potential of our continent,” he said, adding that the trade fair signified the commitment of Africa and its diaspora nations to economic integration and to their collective determination to create a prosperous future.
President Obasanjo further called on African leaders, policy makers, and representatives to foster an environment conducive to trade by eliminating unnecessary bureaucracy, harmonising regulations and investing in necessary infrastructure. IATF2023 was a stepping stone towards a future where African nations traded freely, breaking down barriers and opening doors of opportunities for all.
President and Chairman of the Board of Directors of Afreximbank, Professor Benedict Oramah, referred to the IATF as collective efforts for stimulation of African countries’ economies and attempt undertaken towards holistic economic recovery backed by political support. “It offers a comprehensive solution – it is not just a trade fair, but to make intra-African trade a reality, it is necessary to review border procedures, improve transport infrastructure and make effective the airline routes. The realization the intra-African trade requires effective and regular electricity distribution and broadband connectivity especially in industrialized and urbanized major African cities.
Kanayo Awani, Executive Vice President of the Intra-African Trade Bank at the African Export-Import Bank (Afreximbank), during special creative session held as an integral part of the third Intra-African Trade Fair (IATF2023) held in Cairo, Egypt, has underlined the catchwords such as multifaceted approach, encountering competitiveness, collaborating with business through co-financing agreements, promoting transparent financial practices and financial commitment as necessary factors for boasting sustainable entrepreneurial ventures.
Maurice Okoli is an Int’l Affairs Analyst.