Intra African Trade In The21^st Century:Opportunities And Challenges

Africa’s internal trade (intra-Africa trade) has consistently remained minimal compared to intercontinental trade. The pattern of intra African trade has been heavily influenced by factors that could be linked to Africa’s history, part of which has made trade within Africa cumbersome. This is why efforts for Regional Economic Communities (RECs) have been established to promote trade, customs union, common market and development. However, these initiatives and decades of experimentation have not yield the best response and significance of intra-African trade.Africa is endowed with a number of resources ranging from minerals such as tanzanite, timber, coffee, cocoa, oil and gas, gold, coal, copper, etc; for which demand is externally oriented. Due to the inability to process these resources to finished goods has resulted to a hindrance in the promotion of intra-trade in Africa, which translates to the lack of industrial capacity for diversified manufactured goods to support trade within regional markets. Sub-Saharan African (SSA) countries appear to have relatively few goods to trade with each other.Inadequate infrastructure remains one of the curses to intra-African trade, investment, and private-sector development. Programs to promote transportation, communication networks, investment, industrialization, and information technology would accelerate trade progress and transform Africa into a haven for investment. To tap into this trade potentials, sub-Saharan Africa (SSA) needs to diversify in several ways:it needs to become less dependent on the existing traditional trading partners and imported goods. At the same time it needs to increase its quality of goods from Africa that could be exported and compete in the international market.In addition to increasing the share of intra African trade and exports, Africa needs to establish new trading partnerships with countries like China, who have shown great promise in fostering industrialization and economic development in Africa. Industrialization can now add value to the products which could be traded within Africa and exported. In this context, this paper’s analysis finds that by improving trade-related infrastructure and reducing procedural bottlenecks through trade facilitation initiatives, SSA countries stand to gain from the benefit of increased trade particularly within the region, which is likely to favor the production of value-added goods.The implications of low intra-African trade are many and far reaching. Many opportunities are gained for using trade within the continent to enhance the prospects for specialization, accelerated development and integration. Intra-African trade can generate development, employment and businesses in Africa and is a powerful driver of African growth and economic maturity. Therefore, the main focus is to present the opportunities that African countries can benefit from improved intra-regional trade.The research paper will consist of five chapters, to mean the first chapter will comprise of the introduction part that includes the background of the problem, statement of the problem and the theoretical framework concerning the intra African trade. While on the second chapter the study will provide the current situation of African countries in world trade. The causes and consequences of the low level of intra trade among African countries, what is needed to increase intra African trade, China’s policy in promoting African trade, and the AU’s role in promoting intra African trade. The third chapter will deal with the Opportunities. With the opportunities the researcher will explore the prospects of intra trade in Africa in the likes of Improvements in economic activities i.e. through trade, manufacturing, markets, production from raw materials to finished goods, industrialization, etc. The study will also explore the Cooperative societies and financial institutions interactions in promoting trade and that of Human resources capabilities in boosting intra African trade. The fourth chapter will deal with the Challenges. While on the Challenges the researcher will explore the likes of low investments, inadequate infrastructure, transport sector, Information and Communication Technology (ICT), energy sector, financing infrastructure, Industrialization, corruption and that of peace and security. The last and final fifth chapter researcher will provide conclusion, recommendations for the intra African trade and potential areas for further research on the study.