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GCC-Africa trade flows to grow
22 April 2013 | By Dominic Dudley
Trade levels could soar if Africa reins in its reliance on commodity exports
Despite its endowment of globally desirable natural resources, sub-Saharan Africa is one of the worst performing regions when it comes to trade. That is true both in terms of intra-regional commerce and dealings with the rest of the world. However, international investment has been picking up and, if the continent can move away from relying on commodity exports, there is a chance that trade levels could quickly rise.
Currently, just 13 per cent of African exports go to other countries on the continent, according to the Switzerland-headquartered World Trade Organisation (WTO). Only the Middle East, where 10 per cent of exports stay in the region, performs worse on this count. Other parts of the world manage far higher levels of intra-regional trade. In Latin America and the Caribbean, the figure is 29 per cent; in North America, 48 per cent; in Asia, 54 per cent; and in Europe and the former Soviet countries of the CIS it is 75 per cent.
Lacking diversity
The low level of intra-African trade is due to weak economic and infrastructure ties between countries, coupled with a lack of diversity in what nations produce. Just as Gulf economies are reliant on oil, in Africa most exports are drawn from a relatively small list of commodities.
These commodities include oil and gas from Angola, Cameroon, the Democratic Republic of Congo, Equatorial Guinea, Gabon and Nigeria; cocoa and coffee from Burundi, Ivory Coast, Ethiopia, Ghana and Rwanda; aluminium from Guinea and Mozambique; cotton from Burkina Faso and Mali; cashew nuts from Gambia and Guinea Bissau; and tobacco from Malawi.
TOP 10 GCC EXPORTS TO AFRICA IN 2011
Product group . . . . . . . . . . . . . . . . . . . . Value ($m)
Mineral fuels, oils and distillation products . . . . . . 16,955
Plastics and related articles . . . . . . . . . . . . . . .2,469
Fertilisers . . . . . . . . . . . . . . . . . . . . . . . . .578
Machinery, nuclear reactors and boilers . . . . . . . . . . .564
Aluminium and related articles. . . . . . . . . . . . . . . .452
Electrical and electronic equipment . . . . . . . . . . . . .432
Vehicles (excluding trains and trams) . . . . . . . . . . . .374
Organic chemicals . . . . . . . . . . . . . . . . . . . . . .369
Salt, sulphur, earth, stone, plaster, lime and cement . . . .332
Articles of iron and steel. . . . . . . . . . . . . . . . . .273
Source: International Trade Centre
22 April 2013 | By Dominic Dudley
Trade levels could soar if Africa reins in its reliance on commodity exports
Despite its endowment of globally desirable natural resources, sub-Saharan Africa is one of the worst performing regions when it comes to trade. That is true both in terms of intra-regional commerce and dealings with the rest of the world. However, international investment has been picking up and, if the continent can move away from relying on commodity exports, there is a chance that trade levels could quickly rise.
Currently, just 13 per cent of African exports go to other countries on the continent, according to the Switzerland-headquartered World Trade Organisation (WTO). Only the Middle East, where 10 per cent of exports stay in the region, performs worse on this count. Other parts of the world manage far higher levels of intra-regional trade. In Latin America and the Caribbean, the figure is 29 per cent; in North America, 48 per cent; in Asia, 54 per cent; and in Europe and the former Soviet countries of the CIS it is 75 per cent.
Lacking diversity
The low level of intra-African trade is due to weak economic and infrastructure ties between countries, coupled with a lack of diversity in what nations produce. Just as Gulf economies are reliant on oil, in Africa most exports are drawn from a relatively small list of commodities.
These commodities include oil and gas from Angola, Cameroon, the Democratic Republic of Congo, Equatorial Guinea, Gabon and Nigeria; cocoa and coffee from Burundi, Ivory Coast, Ethiopia, Ghana and Rwanda; aluminium from Guinea and Mozambique; cotton from Burkina Faso and Mali; cashew nuts from Gambia and Guinea Bissau; and tobacco from Malawi.
TOP 10 GCC EXPORTS TO AFRICA IN 2011
Product group . . . . . . . . . . . . . . . . . . . . Value ($m)
Mineral fuels, oils and distillation products . . . . . . 16,955
Plastics and related articles . . . . . . . . . . . . . . .2,469
Fertilisers . . . . . . . . . . . . . . . . . . . . . . . . .578
Machinery, nuclear reactors and boilers . . . . . . . . . . .564
Aluminium and related articles. . . . . . . . . . . . . . . .452
Electrical and electronic equipment . . . . . . . . . . . . .432
Vehicles (excluding trains and trams) . . . . . . . . . . . .374
Organic chemicals . . . . . . . . . . . . . . . . . . . . . .369
Salt, sulphur, earth, stone, plaster, lime and cement . . . .332
Articles of iron and steel. . . . . . . . . . . . . . . . . .273
Source: International Trade Centre
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