Current Status of African Trade

Several opportunities are now opened for engagement in numerous African countries
and it is now the core responsibility for positioning itself to achieve more from this
population. The private sector can actually offer motivation for customs reformation,
individually and throughout coalitions. This apparent evidence is usually ignored in Africa
between customs and the private sector due to the poor past record of government
accountability and transparency (Songwe, 2019).
Across the continent, services are increasing substantially as compared to
manufacturing, and now report for more than 50 percent of the GDP of most countries. It is
apparent that the digital revolution is actually happening in African and that is has spread
beyond cellphones (Rose, 2004). The World Bank has stressed the significance in developing
the infrastructure and skills for identifying the potential of a sector such as integrating the
appropriate regulatory structure. There was a lot of debate on the evidence that the Africa
Growth and Opportunity Act (AGOA) merely has six years left, and that African countries
have to find means for maximizing their benefits, whereas this program persists (Tesfaye &
Abera Kajela, 2018).
It is also essential for developing on the advantages from AGOA as African countries
initiate to develop the follow-on trade as well as investment association with the United
States. There was an apparent sense that African Continental Free Trade Agreement (
AfCFTA) debate should be required to be associated in order to use remaining chances under
AGOA (Verter, 2017). There was also consensus that AfCFTA will reflects international
trade law as some truly design integration processes were designed by African countries for
what will be the major largest free trade agreement. It was also observed that African
countries should pay more consideration to important sectors, which include agriculture, and
enhance regulatory coherence across different areas (Kahyarara, 2018).
90 percent of international trade is transported to international market via overland
road transport service with associations to coastal countries that provide port service facilities
for moving cargo globally, in sub-Saharan Africa. In this regard, the circumstances of road
infrastructure become important for companies that offer and export products and services at
competitive costs (Buyonge & Kireeva, 2008). The countries in sub-Saharan Africa are
rendered by deprived infrastructure in the global and regional markets due to augmented
trade costs to be placed at a disadvantage; therefore, making it complicated to compete on the
overall market. It has been observed that challenges with respect to rail and marine, energy
infrastructure, and road are massive that no single African country or government even with
donor assistance can go it alone in Sub-Saharan Africa (Hanif & Kaluwa, 2016).
By developing regional integration instruments, a number of sub-Saharan countries
have entered into partnership that will be able for addressing challenges to enhance
infrastructure circumstances. Sub-Saharan Africa is made up of fragile and small counties,
which include Niger, Madagascar, Mozambique, and Malawi, who have challenges in order
to sustain road maintenance operations because of inappropriate funds and inabilities for
following strict budget lines.
Confronts experiencing the freight forwarding industry in Africa is majorly due to a
number of aspects that limit the performance index of their operations. In the global economy
, trade logistics is important for the achievement of any economy in the transportation of its
merchandize across borders rapidly, cheaply, and reliably. The lack of strategies and policies
cause such difficulties that obstruct on trade facilitation that share massively to high transport
cost, including customs documentation processes, transit border delays, and port
inefficiencies for enhancing the effectiveness of the products on the global market from sub-
Saharan Africa.
For instance, in the context of Malawi, the constraints experienced by the freight
forwarding industry are approximately shared on the African continent due to her dependence
and her land-lockedness on her neighbors to access import and export traffic ports. In sub-
Saharan Africa, Malawi is considered as one of the deprived developing countries with a very
small market whose economy relies on a minute export crops such as tea, cotton, and tobacco
. On the contrary, the infrastructure of Malawi persists in poor state in terms of rail and road,
which contribute to very high cost of trade, making it complicated to appropriately compete
on the international markets.
The export base of Malawi remains the weakest as the country usually rely on
seasonal crops for exporting her products, in comparison to other landlocked countries such
as Zimbabwe and Zambia. On the other hand, both Zimbabwe and Zambia have strong
mining industries that undertake mining exports within the year. In Southern Africa, transport
ratio cost of the landlocked developing countries aggregate 20 percent but Malawi is singled
out due to entire reliance on the road network and inability to balance its trade shortage
between imports and exports in volumes. The proportion of imports is currently at 30 to 70%,
which covers export trade.
 Therefore, transporters are pressurized to charge for a round trip from ports that serve
Malawi as they are not ensured a return load. The World Bank has proposed the Almaty
program of action to clarify the objectives for action for achieving sustainable development.
These are developing an international framework for landlocked developing countries for
efficient transport and transit systems in order to assist partner countries in order to develop
strategies, policies for development of financial, economic, environmental, and social
sustainability. The efficiency of moving products is determined by international markets
regardless of distance so long as it is well-established and moved with reliability, cheaply,
and speeds.
Some richer and more open countries, in terms of sectoral quality, have well-defined
manufacturing exports such as Morocco. The East Asian countries have reached attained a
saturation point for quality enhancement throughout current sectors and might require to
target new geographic markets that can offer greater scope for development and innovation
for improving their competitive advantage. Other countries such as Mali and Botswana have
successfully moved up the value chain throughout their natural resource sectors. Knowledge
transfers to other export sectors can unlock the possibility of emerging or established sectors.
References
Buyonge, C., & Kireeva, I. (2008). Trade facilitation in Africa: challenges and possible
solutions. World Customs Journal, 2(1), 41-54.
Hanif, R., & Kaluwa, E. (2016). Analysis of transport logistics challenges affecting freight
forwarding operations in Malawi. African Journal of Business Management, 10(24), 607-614.
Kahyarara, G. Maritime Transport In Africa: Challenges, Opportunities, and an Agenda for
Future Research.
Rose, A. K. (2004). Do we really know that the WTO increases trade?. American Economic
Review, 94(1), 98-114.
Songwe, V. (2019). Intra-African trade: A path to economic diversification and inclusion.
Coulibaly, Brahima S..: Foresight Africa: Top Priorities for the Continent in, 97-116.
Tesfaye, C., & Abera Kajela, A. (2018). African Continental Free Trade Area’s Protocol on
Dispute Settlement Mechanism: Legal Analysis of Selected Issues (Doctoral dissertation,
Haramaya University).
Verter, N. (2017). International Trade: The Position of Africa in Global Merchandise Trade.
Emerging Issues in Economics and Development, 65.