World Bank Says Intra-Africa Trade Significantly Lacking

Posted February 8th, 2012 at 12:50 pm (UTC-5)
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The World Bank says African nations are annually losing out on billions of dollars of potential trade earnings because of trade barriers among neighboring countries and onerous shortcomings rooted in the continent’s history.

In a report released Wednesday in South Africa, the World Bank said it is easier for Africa to trade with the rest of the world than it is on the continent. The agency said African countries urgently need to simplify border controls, invest in improved transnational infrastructure and synchronize legal and financial trading rules.

African leaders have called for creation of a continental free trade zone by 2017. But the World Bank said African trade improvements are needed sooner because of the slowing economic fortunes in Europe, one of Africa’s main trading partners. The report said the weakening demand for African products in the 17-nation bloc that uses the euro could trim Africa’s economic growth this year by as much as 1.3 percent.

The World Bank said Africa’s weak trade within the continent stems from the colonial history of many of its countries, where foreign overseers were more interested in their ability to get minerals and crop exports to Europe than they were in building roads and rails to trade with neighboring countries. The agency said Africa needs to act quickly to improve transportation between countries.

At the same time, the World Bank said barriers that inhibit trade on the continent need to be eliminated. In a video accompanying the report , women traders on the border of the Democratic Republic of Congo and neighboring countries said they regularly encountered violence, threats, demands for bribes and sexual harassment from border officials.

The report said paperwork demands for border crossings are excessive, with one truck carrying exports required to hold as many as 1,600 documents.

The World Bank’s economic policy director, Marcelo Giugale, said that better trade within Africa could diversify its exports away from minerals and hydrocarbon products, as well as boost job creation.

He said the “final prize is clear: helping Africans trade with each other,” adding that “few contributions carry more development power than that.”