Compiled by Eamonn Ryan from the presentation transcript
At the 2024 GCCA Africa Cold Chain Conference held on August 23 in Cape Town, Martin Cameron, the managing director of Trade Research Advisory at North-West University, shared insights on reducing trade barriers within the framework of the African Continental Free Trade Area (AfCFTA). This is Part 2 of a three-part series.
Exploring inbound and outbound trade flows in Africa
Cameron highlighted that Africa handles approximately 16 million tons of inbound trade and 22 million tons of outbound trade annually in perishables, totaling 38 million tons. While this volume may seem small compared to global figures, it represents a substantial market within the African context, particularly for businesses operating in countries like South Africa.
He analysed the export and import patterns, pointing out that European markets are the primary destinations for African exports, followed by Asia, Africa itself, the Middle East and North America. In contrast, when it comes to imports, Africa stands as a key supplier to itself, although its rank drops to third in terms of value. This suggests that while Africa is engaged in significant internal trade, the commodities exchanged are often lower in value, signaling an opportunity for growth through value-added trade.
Cameron noted, “This observation aligns with the ongoing discussions about the need for value addition and economic development.” He stressed that Africa has yet to fully capitalise on the economic potential of its trade, particularly in the perishables sector. He cited the example of transporting goods from Rwanda to Luanda, which takes 56 days by sea via Dar es Salaam, highlighting the logistical challenges that impact trade efficiency.
He further explored the perishable goods market, pointing out that while perishables account for about 5% of total trade, their true significance might be understated. This sector largely consists of food and pharmaceuticals, with pharmaceuticals leading in value despite lower volume. This distinction reflects the complex relationship between the weight and value of traded goods, underlining the vital role these products play in the market.
Turning to the challenges faced by exporters, Cameron introduced the concept of the “exporter’s dilemma.” He referenced ongoing surveys from the World Trade Organization, OECD and International Trade Centre, which consistently show that lack of access to information about export opportunities is a major concern for exporters of all sizes. “This information gap can significantly hinder performance, especially when combined with challenges related to physical infrastructure and logistics.”
Cameron emphasised the need to address this information gap. By improving access to data and insights on export opportunities, stakeholders can enable exporters to make more informed decisions, ultimately boosting their performance in the market.
In conclusion, Cameron encouraged participants to engage in discussions about overcoming these barriers and using existing trade flows to the mutual benefit of all stakeholders. By creating a more informed and interconnected trading environment, Africa can unlock its full potential in the global market, particularly in the perishable goods sector.