Business News of 2014-07-08

Intra-African trade too low — UBA

Trade among countries on the African continent is currently estimated at about 12 per cent, with the bulk of the region’s trade being with Europe and America.

This figure, according to the Managing Director of UBA Ghana, Mrs Abiola Bawuah, is far below the intra-African trade potential, as 70 per cent of Europe’s trade is within its own continent.

The case, she explained, was same in Asia and in North America, where 40 per cent of their trade is within their continent.

Speaking at a trade forum organised by the bank in Accra on the theme, “Driving Regional Trade through Strategic Partnerships,” Mrs Bawuah attributed the low intra-African trade to poor infrastructure, high cost of doing business and limited role played by the private sector to improve trade.

She noted that during Africa’s colonial period, road and rail routes were built for the purposes of transporting goods out of African countries instead of creating regional networks for trade purposes. She added: “Sadly, the infrastructure network has not changed much, post-independence.”

“It takes a significant amount of time and money to cross borders because of the poor logistics and transport infrastructure, which is a deterrent to intra-African trade,” she explained.

Mrs Bawuah also added that as a result of this, the cost of doing business in Africa was very expensive.

According to her, the limited role of the private sector in regional initiatives and efforts has also contributed to the weak trade performance on the continent.

“It is the private sector that understands the constraints facing enterprises and is in a position to take advantage of the opportunities created by regional trade initiatives,” she added.

The Minister of Trade and Industry, Mr Haruna Iddrisu, in a speech read on his behalf, lauded the bank for engaging in trade facilitation considering the huge potential it holds for the country.

He also reiterated the need for financial institutions to form strategic local and international partnerships to push trade on the African continent forward.