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UNCTAD to offer Africa assistance to boost intra-continental trade

Ghana Business News, Ghana

UNCTAD to offer Africa assistance to boost intra-continental trade

24 April 2012

By Ekow Quandzie

The UN Conference on Trade Development (UNCTAD) says it will offer assistance with three elements of the newly adopted African Union (AU) action plan on intra-African trade.

The UN agency disclosed this during a meeting with African Trade Ministers attending the UNCTAD XIII quadrennial conference in Doha, Qatar April 20, 2012.

Members of the African Union adopted an Action Plan to accelerate the formation of a Continental Africa Free Trade Area at a meeting in January.

In a statement, UNCTAD said it “has offered its expertise to help with three aspects of the plan, which is intended to prepare the way for ultimate establishment of a free trade area. The organization will provide assistance relating to trade policy, trade facilitation, and productive capacity.”

The AU plan has seven areas of action.

UNCTAD officials said that among specific help the organization can offer are expansion and upgrading of its Automated System for Customs Data (ASYCUDA), already in use in 41 African countries and valuable for reducing delays when goods cross borders; design and implementation of rural logistics centres, which help link farmers and rural cooperatives to production centres and transport systems; and development of regional transport policies, which can smooth the flow of goods through agreed regulations and standardized operating systems.

On the issue of expanding productive capacity, UNCTAD said the continent’s needs include more modern production facilities, more efficient transport and communication systems, and the establishment of credible certification systems that ensure adherence to international production norms and standards.

Speaking at the opening of the trade ministers’ meeting, UNCTAD Secretary-General, Supachai Panitchpakdi said Africa has 16% of the world’s population but only 2% of global Gross Domestic Product. “Are we really achieving the goals Africa has set for itself?” he asked.

He adds “We are not proceeding as fast as we need to be, and much work lies ahead.”

In Africa, intra-regional trade accounts for only 11% of overall African trade.

Trade experts believe increasing trade within the continent would provide such benefits as more rapid shipping, potentially lower transport costs, and the fertilizing effect of the spread of technology, innovation, and business methods well-suited to local conditions.

According to UNCTAD, experience also has shown that intra-regional trade is less vulnerable to international economic shocks – a matter of some importance after Africa was battered by the recent global recession.

“It is more effective at creating jobs; and it encourages the expansion of productive capacity, since neighbouring countries share technology and methods, and – with markets close by offering a competitive advantage – improve their respective abilities to upgrade the products they make,” the agency said.