By Mary Onyia
Manufacturers of goods in Africa have expressed concern that despite the continent’s manufacturing and trade potential, they continue to face costly and often frustrating barriers when moving goods across borders.
The Co-Secretary of the Pan-African Manufacturers Association (PAMA), Segun Ajayi-Kadir, who spoke on behalf of members, expressed concern that despite Africa’s manufacturing and trade potential, manufacturers continue to face costly and often frustrating barriers when moving goods across borders.
Ajayi-Kadir regretted that despite the launch of the African Continental Free Trade Area (AfCFTA) in 2019, intra-African trade in manufactured goods remains strikingly low.
He said trade between African countries only accounts for only 18 per cent of the continent’s total commerce, a fraction of Europe’s 60 per cent and that the export of value-added manufactured products is still severely constrained.
He argued that the problem, which is not new, reflects deep-rooted structural weaknesses that have persisted for decades, long before AfCFTA came into being.
Pointing out that Africa’s integration, built around eight regional economic communities, is yet to deliver seamless cross-border trade in manufactured goods, with many economies, including Nigeria, still exporting raw commodities rather than processing and exchanging value-added products internally.
The outward orientation, he said, not only perpetuates dependency but also stifles the emergence of integrated regional industrial value chains that could drive sustainable trade across borders and demonstrate Africa’s productivity as a major global exporter of manufactured products.
“Unfortunately, trade across Africa remains complex, costly and operationally inefficient, despite decades of regional integration efforts and AfCFTA.
“While policy frameworks claim liberalisation, the lived reality for us continues to be shaped by a combination of structural, institutional and market constraints.
“At the core of these challenges are high tariffs and non-tariff barriers (import bans, quotas, and inconsistent standards), inefficient customs, poor transport and logistics infrastructure, as well as limited regional connectivity, which increases transit times and reduces supply chain efficiency.
“Others include high cost of trade finance, currency constraints, volatility and limited convertibility, weak implementation of regional agreements and prevalence of informal and illicit trade, which is encouraged by weak border enforcement and entrenched informal networks diverting trade from formal channels and eroding government revenues.
“Africa’s limited development of regional value chains is a fundamental structural challenge. Unlike the EU or Asia, where production is integrated across borders, African economies largely operate in isolation. This limits specialisation, reduces economies of scale and weakens participation in global production networks”, he said.
Calling on governments, development institutions and the private sector to remove the barriers and create an enabling environment for manufacturers to trade across borders, the PAMA chief recommended five transformative policy actions.
These include smart borders and digital trade, a predictable trade environment with the elimination of non-tariff barriers, consistent AfCFTA enforcement and real-time monitoring, accessible trade finance, integrated/sustainable trade corridors and uniform cross-border industrial ecosystems.