POOR infrastructure and prohibitively high logistics costs are major impediments to boosting trade within Africa despite the potential of the African Continental Free Trade Area (AfCFTA).
Confederation of Zimbabwe Industries Matabeleland chapter president Stephen Ncube made the remarks during the ZimTrade Buyers seminar in Bulawayo.
He said shipping a container between African ports could be three times more expensive than shipping it to Europe.
“The shipping cost of a container from Durban to Luanda, for example, is three times the shipping cost of a container from Durban to Rotterdam,” Ncube said.
“Sea freight makes up a little under 1% of all intra-Africa trade.”
The challenges extend to air transport, where Ncube bemoaned that air freight in Africa costs between US$3 and US$7 per kilogramme, compared to the international average of US$1,50 to US$4,50.
This severely limits the continent’s economic potential, he noted.
Currently, intra-Africa exports account for only 15% of the continent’s total trade, a figure dwarfed by internal trade in other regions.
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Intra-Europe trade accounts for 68% of Europe’s total trade, while trade among Asian countries accounts for 45%, according to the United Nations Conference on Trade and Development (UNCTAD).
Ncube pointed to the roles of policy and digital innovation to address the challenges to boosting trade.
“The AfCFTA provides the regulatory framework, while the Africa Trade Gateway provides the digital infrastructure to facilitate trade,” he said.
He encouraged businesses to adopt the Africa Trade Gateway (ATG), describing it as “a digital ecosystem that is facilitating trade activities for millions of importers, exporters and service providers across Africa and beyond”.
AfCFTA projects a significant increase in intra-African trade, from 15% to 25% by 2040.
This growth is expected to unlock an additional US$4 trillion in investment and consumer spending.
“Intra-Africa trade is crucial to enable African countries to develop competitiveness and productivity of goods and services produced on the continent,” Ncube indicated.
