Chamber Trade Sweden

Serious Lack of Sub-Saharan African Intra Trade

Nyhet   •   Jan 29, 2016 12:07 CET

One of Chamber Trade Sweden’s key goals when partnering with local business member organisations in developing countries is to promote trade. During the past four years we have had numerous workshops and trainings in the name of trade, with our partners in Ethiopia, Kenya, Uganda, Tanzania, Rwanda, Zambia, Zimbabwe, Botswana, Namibia, South Africa, Iraq, Pakistan and Indonesia. When it comes to Africa, it is not only trade with Sweden that we are promoting but rather Regional Trade, within Sub-Saharan Africa.

Promoting regional trade within Sub-Saharan Africa should be one of the key goals for development cooperation going forward. Hopefully regional trade in SSA got a push forward this week when the WTO Ministerial was held in Nairobi.

The reasons for promoting regional trade in SSA are many, not least the fundamental link between trade, growth and poverty alleviation. Looking back at the economic history and industrialisation of Sweden and the western world, we could never have developed without trading with our neighbouring countries. Sweden’s major trading partners today are Norway, Germany and Denmark. The US top three trading partners are Canada and Mexico. Indonesia’s trade is dominated by China, Japan and Singapore. Brazil is pivotal both for Chiles exports and imports. In contrast to this, many African countries have China, India and Europe as their main trading partners, rather than their own neighbours.

In a special report commissioned for our chamber partner organisations in Africa, “Globalization, Protectionism and Economic Growth”, the author Fabian Wallen puts forward conclusions underlying the serious effects of the lack of regional SSA trade and integration. “Even though there are a number of regional trade agreements in SSA, trade between the different regions is hampered by relatively high tariffs and other trade barriers, and trade within the regions is often restricted by a variety of non-tariff barriers. As a consequence, the region’s intra-trade, as a share of total exports, amounts to only 17 percent, which can be compared with over 60 percent in the European Union and over 50 percent in Asia and the NAFTA-region.”

The report was presented at chamber seminars in Zambia and Zimbabwe, in November, as part of our capacity building on Industrial Development. The report will be launched officially in the beginning of 2016. We hope the report will promote further discussion within the chamber family in Africa.

Chamber Trade also has looked closer at the numerous ongoing political integration initiatives in Africa, in an article on our website written by Bronwen Kausch from Peace Systems, South Africa. It is time for African countries to take a step forward and make use of the spaghetti bowl of regional trade agreements it has on the table. Business stakeholders need to put pressure on African governments to get their priorities right on opening up for more regional trade. This is also the best remedy to help diversify African economies and reduce dependency on natural resource exports to China.

PS. Read more news here from Chamber Trade Sweden's latest newsletter