African trade integration is still a far way off, envoy tells Parly

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  • Deputy Director General at the Department of Trade Industry and Competition, Xavier Carim, said Africa's share of world trade was small.
  • The EU remains SA's largest trade partner. 
  • While intra-African trade has grown, it lags behind intra-Asian trade and intra-EU trade.

African states are progressing with trade regimes that are past due in a bid to bolster trade within the continent, Deputy Director General at the Department of Trade Industry and Competition’s Trade Policy, Negotiations and Cooperation branch Ambassador Xavier Carim told Parliament on Tuesday.

The European Union remains South Africa’s largest trading partner, with 24.5% of the country's total exports, and taking on 29.7% of SA’s total imports in 2019.

The Covid-19 outbreak presented challenges to trade and countries closed up their borders at the height of the pandemic.

However, the virus spread more slowly through the African continent that it did through much of Europe and the United States.

Carim told Parliament's Portfolio Committee on Trade and Industry that Africa's share of world trade was small, at about 2.6% in 2018.

He said intra-Africa trade grew to 16.1% of Africa’s total trade in 2018, but this was low compared to intra-Asian trade (59%), intra-North American trade (48%), and intra-EU trade (67%).

"Although intra-Africa trade is low, Africa is by far the second-most important export market for most African countries, behind the EU. Seven African countries count Africa as their main export market and 25 count Africa as their second-most important market," said Carim.

Carim said over three-quarters of intra-African trade takes place within regional trading blocs, with intra-Africa trade largely in value-added manufactured products.

Carim said SA accounts for 23% of total intra-African trade in imports and exports, while African countries were the destination of 26.5% of all SA’s exports in 2019, driven largely by the Southern African Development Community region.

"SADC is important to SA, accounting for more than 87% of all South Africa's exports to Africa. Key SADC markets are Botswana, Namibia, Mozambique, Zambia, Zimbabwe. In 2019, 83.5% of SA exports to Africa were manufactured products compared to 55.3% in its global export basket," Carim said.

He said to achieve the Africa Continental Free Trade Agreement, Africa adopted systems to "liberalise" trade between African nations. Among others, 90% of the tariffs liberalised over five years, followed by another 7% over 10 years.

Carim said tariff negotiations were ongoing, with 12 member states having submitted tariff offers and negotiations still required for trade on sugar, autoparts, clothing and textiles. He said six members, including SA, have submitted offers for trade in services.

"Heads of State agreed that a Summit be held in December 2020 to finalise outstanding issues and that AfCFTA be operationalised by 1 January 2021 - contingent on the evolution of the pandemic," Carim said.

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