African countries focus on global trade prospects, challenges. In the same direction, the results of this study also show that IIT exists more in developed countries than in developing countries. Buyers and sellers rarely meet one another and personal contact is rarely possible. Brief introduction to this section that descibes Open Access especially from an IntechOpen perspective, Want to get in touch? And as history's largest free trade agreement, which has a market size in the region of $3 trillion, most people are excited at the development. More focused and gradual steps that are carefully executed at the domestic level may be the best place to start. It evaluates eight markets on six core dimensions of trade (i.e., infrastructure quality, custom performance, logistics competence, tracking and tracing, and timeliness of shipments) on a scale from 1 (worst) to 5 (best). Source: Compiled from UNCTAD. Address by Alassane D. Ouattara Deputy Managing Director of the International Monetary Fund at the Southern Africa Economic Summit sponsored by the World Economic Forum Harare, May 21, 1997 This implies that the continent’s export structure has not proportionally matched with that of its imports from its partners as proposed by intra-industry or Linder’s similarity [6] trade theories. Africa to be a success, Africa’s leaders will have to move beyond grand gestures and abstract visions. For instance, as shown in Table 11, global agricultural exports by region showed Europe (40.8%) with the highest share in the world, followed by Asia (22.4%) and North America (15.7%) and South and Central America (12%), while Africa, which has heavily depended on agriculture for food, economic growth, and development, merely accounted for 3.6% of total global food exports in 2014 [24]. Trade similarity index in developing countries has increased over time, from 0.72 in 1995 to 0.81 in 2013, reaching the same levels with advanced economies. Both EPDI and EPCI show that Africa has concentrated only in few product groups for exports. Developed countries’ relative importance as key suppliers in global markets has declined. Africa has been negotiating bilateral and multilateral trade agreements that require reciprocity, but it has to preserve flexibility. Note: S* stands for Southern Africa. However, the challenges of International Relations came with decolonization and the failure of the Westphalian state system in post-colonial Africa. Intra-African trade is the least compared to other regions, averaging about 10- 12 per cent, not only lowest but also stagnant. To some extent, trade maintains stable demand and supply that allows efficient exchanges that stimulate economic growth and development in countries [11, 12]. Finally, recommendations for necessary measures to stimulate production and trade in Africa in the present era of free trade and negotiations at the WTO and other regional bodies are summarized here as follows: African countries should create a friendly environment and provide/guarantee affordable/soft loans to producers and traders to support their services and productive initiatives. To boost intra-regional trade, African regional bodies such as the ECOWAS, EAC, and SADC have launched Customs Unions to abolish duties and taxes of equivalent effect and remove nontariff measures that constraint trade within the continent. Contact our London head office or media team here. The movement of goods, services, finance, and human resources across national borders has been driving socioeconomic and political globalization, especially in the past six decades. With greater integration could come greater country specialization – such as basic manufacturing in metal and plastic products that are expensive to import from the global market. An essential factor for trade policy to advance industrialization is the inevitable balancing between promotion of relatively well-developed sectors and simultaneous protection and support infant or fragile sectors in economies in Africa. But most of the work available is unskilled or low-skilled, in part because the region has the world’s lowest levels of access to higher education. Industrialization and trade policy bottlenecks: As shown in the previous subchapters, African exports are dominated by raw or intermediate products. These must be addressed if the AfCFTA is to achieve its objectives. World merchandise exports (US$ billions, current and share), 1948–2015. This shows that the continent is vulnerable to the global shocks of these few export products. Open Access is an initiative that aims to make scientific research freely available to all. Trade similarity index, as developed by modern trade theories [6, 8, 20], is an indicator that helps to verify whether the structures of two economies or continents’ products traded are similar or dispersed. Also, EAC and SADC performed better than the African average in intra-regional imports during the same time under review. Nigeria’s oil exports accounted 94.5% of total exports of the country, and the value of the products exported dropped by −44% in 2015. Angola’s oil export accounted 97% of total exports of the country, while pearls, precious stones, metals, and coins (code 71) accounted for 2% of the total exports in 2015. It uses the LPI to carry out a survey in partnership with academic, global institutions, private companies, and individuals that engaged in international logistics. Nahanga Verter (September 13th 2017). Intra-African trade has tremendous potential to create jobs, boost investment, and stimulate growth and development in Africa. Also, studies by Grubel and Lloyd [8] confirm high ratios in the industrialized economies. Consequently, African processors and exporters are being marginalized and excluded from taking competitive advantage in the global markets, thus partly impeding production, trade, and development in the continent. Arguably, African countries have been left in the cold as they struggle to compete with advanced economies. Trade costs as well as bureaucratic or procedural bottlenecks at home and the border, coupled with high transportation costs, appear among the factors that are constraining trade SSA countries. It emphasizes on the levels of overlap of imports and imports, also known as two-way trade in homogeneous products. Even though the intra-African exports in total merchandise exports in the continent rose to 17.7% in 2015 from 12.4% in 1995, it was still low compared with 58% in developing nations, 60% in Asia, 61.6% in the EU (28), and 51% in America (Table 10). African countries should as a matter of urgency provide transport and other critical infrastructure facilities to ease movement of inputs to the sites and output to the markets for global competitive supply chains to be ensured. The inability of African countries to favorably compete in the world markets has been partially reflected in their negative trade balance and decline in the proportion of global merchandise trade. But skeptics have pointed to impending challenges, especially those which affect SMEs. Africa’s current economic growth rate is far too low. The level of African export merchandise trade rose from $3.4 billion in 1948 to about $92 billion in 1993. It offers the potential for development and expansion, but without the risks of internal research and development. Historically, between seventeenth and early twentieth centuries, the share of agricultural trade as a percentage of total global trade was above 50%. Arguably, “high trade costs effectively nullify comparative advantage by rendering exports uncompetitive. We are a community of more than 103,000 authors and editors from 3,291 institutions spanning 160 countries, including Nobel Prize winners and some of the world’s most-cited researchers. Even though countries’ taxes have been cut, especially since the beginning of the current Doha Round in November 2001, it persists in many commodity chains, especially in processed products. Globally, WTO seems to be at the crossroad at the moment in ensuring that all the agreements are implemented for mutual trade benefits. In other words, the index measures the dispersion of export’s or import’s values across exporter’s or importer’s products. African products are prohibited partly because of producers and exporters in the continent’s poor awareness and understanding of the applicable global standards and best practices. This necessarily limits the amount of detail we can offer on each area, but provides an important mapping of the problems. Another important infrastructure that has challenged the economic development of Africa is a good transportation network to facilitate movement of people and goods within Africa. The South African Institute of International Affairs cordially invites you to a Speaker’s Meeting to be addressed by the Honourable Dr Rob Davies, Minister of Trade and Industry on ‘Major Trade Policy Challenges Facing South Africa’ The Honourable rob davies is Minister of Trade and Industry of the Republic of South Africa. Arguably, developed countries’ hidden agenda may be to ensure that African nations remain suppliers of industrial raw materials to their matured industries and, in return, import their manufactured or processed products as postulated by the dependency theories (Table 5). Despite this development, challenges remain prevalent in logistics infrastructure. Interview with Donald Kaberuka, President of the African Development Bank ©AfDB. Nontechnical measures: contingent trade-protective measures, nonautomatic licensing, quotas, prohibitions, and quantity-control measures other than for SPS or TBT reasons; price-control measures, including additional taxes and charges; finance measures; measures affecting competition; trade-related investment measures; distribution restrictions; restrictions on post-sale services; subsidies (excluding export subsidies under p7); government procurement restrictions; intellectual property; and rules of origin. Health outcomes are worse in Africa than anywhere else in the world, … They developed an index called the Grubel-Lloyd index (GL index) to measure the degree of the structure of trade overlap in countries. There is no doubt opening up Africa to global trade integration will present domestic challenges in the form of fiscal pressures and short term adjustment costs [194]. The overdependence of some oil-producing countries on oil exports in the region resulted in the decline of Nigeria’s share of the world merchandise exports from 0.9% in 2012 [17] to 0.31% in 2015. According to Moïsé and Le Bris [25], even though attaining the standard requirements leads to additional production and trade costs, it might also facilitate trade as it stimulates demand for commodities as consumers get information on how to use and quality of the products being traded. This study reviews the trade policy situation in Tanzania and identifies a number of key issues and challenges for the country. Similarly, the findings show that Oceanic, SSA and Africa as a whole have been far from witnessing IIT. Ill Health. According to one estimate, by 2020, Africa stands to gain more than 7 percent in GDP and more than 22 percent in exports brought about by trade facilitation. On individual country levels, Table 2 indicates that South Africa, Nigeria, Algeria, Angola, and Morocco were the leading merchandise exporters in Africa in 2015. On the other hand, they are mainly importing manufactured commodities, such as synthetic rubber, electrical machinery, apparatus, textile yarn and related products, motor vehicles and bicycles, machinery and transport equipment, medicines, fuels, wheat, paste of tomatoes, chocolate, refined sugar, tractors, and other modern technologies (Tables 6 and 7). World merchandise imports by region ($ billions and %), 1948–2015. However, these countries’ export values in the world market shrank from 3.5% in 1948 to 1.4% in 2015 (Table 3). Once fully implemented, the AfCFTA is expected to cover all 55 African countries, with a combined GDP of about US$2.2 trillion. Mercy Mpinganjira (August 22nd 2012). Cost is a concern, but the time required to compile documents and gain approval is the most taxing aspect of international commerce. Also, average time takes exporters 20 days to export goods, while import takes an average of over 30 days in African countries and other LDCs across the globe [27]. African countries increase tariffs to raise revenues and to protect infant industries, whereas developed countries increase the tax to curtail trade so as to protect domestic producers that are vulnerable to global competition. Trade similarity and complementary. Product concentration and diversification indices by economy, 1995–2015. In this brief we attempt to summarise them against the backdrop of Africa's broad development priorities. The index value ranges from 0 to 1. 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