Every year, Africa is slowly but surely moving towards greater political and economic integration. A number of projects are underway, such as the establishment of the Continental Free Trade Area (CFTA) and the Single African Air Transport Market. It must be stated that today the potential for intra-African trade remains under-exploited, accounting for only 12% of Africa’s total trade. And one of the first causes of the weakness of its intercontinental trade remains higher transport costs than those in other regions.
In a recent research note entitled “Regionalism in Africa: Soft and Hard Transport Costs”, the French Development Agency (AFD) rightly illustrates the existence of a a causal link between the level of transport costs and the weaknesses of regionalism in Africa. In terms of tariffs, researchers believe that while African countries have effectively lowered tariffs on the products of their trading partners, the average level remains higher than in the rest of the world. But many other obstacles contribute to these trade costs, such as excessive regulation and delays at the borders and in ports that are harmful to businesses.
This note focuses mainly on the analysis of trade facilitation measures (soft) and logistic performance indices (hard), two distinct dimensions of transport costs. In the Doing Business report of the World Bank, the point of view of companies is presented via their perception of the regulation and the institutional capacities, for example, that constitute the soft indices. Conversely, the Logistic Performance Index (LPI) is based on six aspects that are much more quantitative and concrete (hard), such as the ability to track transport or the frequency with which shipments arrive on time at their correct destination. Combining these different data from the World Bank, the conclusion is the same with regard to both aspects: Africa is at the bottom of the pack, even when compared to other emerging regions.
It is therefore urgent to act on opening up African countries to one another by means of a large number of measures. Our continent has everything to gain from goods “circulating better in a more integrated space” and “value chains” that can “be set up at the African level before joining international circuits”. The importance of the transport sector and logistics performance is therefore critical for enabling Africa to increase the size of its markets and to achieve economies of scale.
At the same time, regional integration needs to take shape at the institutional and regulatory level, in order to decongest our borders and ports by harmonising our customs policies. If it succeeds in closing this gap, our continent will be able to generate a surplus of integration and therefore of economic growth, the gains of which will benefit our populations and improve their living conditions. We the African countries only have to take together the path of regional integration by breaking down the barriers that hinder our commercial relations.
Published by