African states should trade more with one another, a report from the UN trade and development body says. Regional trade alliances have been trying to bring down barrierrs for years - largely in vain!
Emmanuel Edra is in the market in Jos when he takes the phone call from Deutsche Welle. He has been cultivating his potato crop on the fertile terrain of central Nigeria for more than 30 years. The tracts of land around Jos are the largest potato growing area in West Africa. A year ago, Edra discovered that there was a big demand for potatoes in neighboring Benin. So he hired a truck, filled it up with sacks of potatoes and drove 1,000 kilometers to Benin's capital Cotonou.
Still on Nigerian territory, he had to stop frequently at army and police checkpoints, which cost him time – and money in the shape of bribes so he could continue his journey. But his troubles really started on the border. "Everywhere I turned I had to pay bribes," he said.
When he left Jos he had 129 sacks of potatoes in his truck, but because of the delays most of them had turned rotten before he arrived in Benin. "I will not attempt this sort of deal again," he told DW.
Such are the obstacles to free trade on the continent of Africa, as the UN trade and development body UNCTAD has just confirmed in its latest report.
Commodity trade with the North dominates
In 1997, 20 percent of total African trade took place within the sub-Saharan region. In 2013, the figure is just 11 percent. In other words, the region's share of trade has roughly halved.
This is a serious problem, according to Taffere Tesfachew, director of UNCTAD's Africa division. African trade tends to center on the North and its developed economies, he said. There was also a dependence on commodity exports, whose price fluctuations have an enormous domestic impact on the exporting nations. "Asian countries, on the other hand, trade more amongst themselves and are therefore better protected against the eurozone crisis," Tesfachew said.
Asian states sell half of the goods they produce to other Asian nations; in Europe, intra-European trade accounts for more than 70 percent of total trade volume.
African governments and the African Union are well aware that they are lagging behind. They have been trying to bring down trade barriers within regional blocs such as the Economic Community Of West African States (ECOWAS) and the East African Community (EAC). Their efforts have met with modest success. According to UNCTAD, a large share of African trade now takes place within these regional blocs. Nine countries, including Kenya, Senegal and Rwanda, buy more than 40 percent of the goods they import in other African countries.
54 nations with trade barriers
But the regional blocs are also part of the problem, because many states are members of several blocs simultaneously. Economists refer to the "spaghetti bowl effect." Paul Collier from the University of Oxford, who specializes in African economies, said that the bitter reality on the African continent is that we have 54 countries full of trade barriers and "those countries block trade with their neighbors."
The latest UNCTAD report doesn't only call on African governments to reduce trade barriers, but also to persevere with industrialization and the expansion of infrastructure. Individual private enterprise and the private sector generally should be encouraged, as this was the only way to create sustained growth on the continent, the report concluded.
Africa's agricultural sector can't even feed the continent's population. 37 African nations import more food than they export. Nigeria is one of those nations – much to the annoyance of potato farmer Emmanuel Edra. After his abortive trip to Benin, he will limit himself to selling his crop in Jos. International hotels in Lagos and Abuja will continue to import frozen French fries from Europe.