Commercial News from Africa

Inter-regional trade in Africa - expanding beyond political commitments. Africa's inter-regional trade is among the worst in the world. There is frequent debate among countries on how to resolve the current state of play, but little to show for it. Trade flourishes when countries produce what their trading partners are eager to buy, and where they have a comparative advantage to produce it. With a few exceptions, this is not yet the case with Africa. The continent produces what it does not consume and consumes what it does not produce: it is a weakness that often frustrates policy makers; it complicates regional integration and is a primary reason for the low intra and inter-regional trade, which is between 10% and 12% of Africa's total trade.

The problem is also partly the mismatch between the high political ambitions African leaders hold and the harsh economic realities they face often siting a distinct reluctance to empower institutions - potential loss of sovereignty and policy space as key concerns.

Comparable trade figures are 40% in North America and roughly 60% in Western Europe. Over 80% of Africa's exports are shipped overseas, mainly to the European Union (EU), China and the US. If you throw into the mix complex and often conflicting trade rules, cross-border restrictions and poor transport networks, it is hardly surprising that the level of regional trade in Africa has barely moved the needle over the past few decades.

There is much that African countries need to do to increase regional trade. For instance, they need to reduce dependence on commodities by expanding the services sector, including telecommunications, transport, educational and financial. They need to increase investments in infrastructure. And they need to eliminate or significantly reduce non-tariff barriers that are major roadblocks to intra-African trade.

Zimbabwe and China sign nine mega deals. Zimbabwe and China yesterday signed nine landmark agreements that will see the emerging global giant from Asia providing financial support for the much-needed economic enablers in critical sectors that include energy, roads, national railway network, telecommunications, agriculture and tourism as part of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation. One of the four pillars of Zim-Asset is the Infrastructure and Utilities cluster which spells out a number of major projects to revive the economy by rehabilitating, upgrading and building key physical as well as social infrastructure and utilities to enable the turnaround of the economy and create business and employment opportunities.