African Trade Ministers meeting here the day before the opening of the UNCTAD XIII quadrennial conference were offered help by the organization in implementing a new plan intended to boost trade between the continent’s nations.
Members of the African Union adopted an Action Plan to Accelerate the Formation of a Continental Africa Free Trade Area at a meeting in January. UNCTAD has offered its expertise to help with three aspects of the plan, which is intended to prepare the way for ultimate establishment of a free trade area. The organization will provide assistance relating to trade policy, trade facilitation, and productive capacity. (“Productive capacity” is an economy’s ability to produce a broader range of goods, and goods of greater sophistication.) ; The plan overall has seven areas of action.
Speaking at the opening of the trade ministers’ meeting, UNCTAD Secretary-General Supachai Panitchpakdi said Africa has 16 per cent of the world’s population but only 2 per cent of global Gross Domestic Product. “Are we really achieving the goals Africa has set for itself?” he asked. “We are not proceeding as fast as we need to be, and much work lies ahead.”
Intra-regional trade, as it is called, is considered vital for spurring and sustaining economic growth. European countries, for example, carry out over 70 per cent of their trade with other European nations.
In Africa, by contrast, intra-regional trade accounts for only 11 per cent of overall African trade. Increasing trade within the continent would provide such benefits as more rapid shipping, potentially lower transport costs, and the fertilizing effect of the spread of technology, innovation, and business methods well-suited to local conditions. Experience also has shown that intra-regional trade is less vulnerable to international economic shocks – a matter of some importance after Africa was battered by the recent global recession. It is more effective at creating jobs; and it encourages the expansion of productive capacity, since neighbouring countries share technology and methods, and – with markets close by offering a competitive advantage -- improve their respective abilities to upgrade the products they make.
UNCTAD officials said that among specific help the organization can offer are expansion and upgrading of its Automated System for Customs Data (ASYCUDA), already in use in 41 African countries and valuable for reducing delays when goods cross borders; design and implementation of rural logistics centres, which help link farmers and rural cooperatives to production centres and transport systems; and development of regional transport policies, which can smooth the flow of goods through agreed regulations and standardized operating systems. More efficient transport can be expected to give a significant boost to trade within Africa
On the issue of expanding productive capacity, UNCTAD said the continent’s needs include more modern production facilities, more efficient transport and communication systems, and the establishment of credible certification systems that ensure adherence to international production norms and standards. UNCTAD has carried out extensive research in recent years on meeting the practical challenges of improving productive capacity in developing countries.