Olusegun Zacchaeus, partner, PwC Strategy and Practice, West Africa, has highlighted six key ways to transform intra-Africa trade.
They are improving the continent’s infrastructure, which requires $130-170 billion annually, strengthening institutional frameworks, investing in upskilling and education at a large scale, promoting well-functioning markets and regional integration, rebuilding fiscal buffers and addressing non-tariff barriers.
This was revealed at BusinessDay’s Africa Trade Summit and Investment Summit themed “Reimagining Economic Growth in Africa” on Thursday.
The Summit which stands as a platform for industry leaders and policymakers to share insights and form strategic collaborations that drive economic growth and development across the African continent sought to proffer solutions to trade bottlenecks between countries in Africa.
During his presentation, he said one critical factor to both enhance and get the benefit of trade in the continent, is enhancing the quality of infrastructure, especially transportation infrastructure, which requires $130-170 billion annually.
“A very key imperative to transforming intra-Africa trade is enhancing the quality of infrastructure, especially transportation infrastructure. This will require $130-170 billion annually,” he said.
He identified other critical factors including strengthening institutional frameworks, investing in upskilling and education at a large scale, promoting well-functioning markets and regional integration, rebuilding fiscal buffers, and addressing non-tariff barriers.
“Trade is a pathway to prosperity for Africa, but in the last 10 years, Africa has grown at an average of less than three percent.”
Zacchaeus spoke about how internal trade in Africa is growing slower than external trade, which means “we are trading less and less with ourselves as a continent and more externally, whereas the sad part of our external trade is, most of it is non-value driven trade, dominated by commodities and natural resources as key exports.”
External trade grew at an average growth rate of 4 percent between 2014 and 2022 while intra-African trade grew at one percent in the same period, according to the African Growth and Opportunity Act, and although external trade remains dominant in terms of value, intra-African trade has the potential to grow significantly if implementation of AfCFTA is successful.
