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Africa urged to increase intra-African trade at Afreximbank conference

Updated: 06 29 , 2017 14:12
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KIGALI, June 28 -- Experts meeting here on Wednesday for regional trade promotion urged African countries to promote intra-African trade and economic integration to address development challenges in African countries.

A series of events hosted by African Export-Import Bank (Afreximbank) for its annual general meeting kicked off Wednesday in Kigali. The four-day events hoped to act as a catalyst to boost the African trade agenda with more than 100 speakers, academics, and African and global trade experts participating.

Afreximbank introduced a strategic plan to addressing both old and new challenges facing African countries on their development path, said Hippolyte Fofack, Chief Economist and Director of Research and International Cooperation of Afreximbank.

The first two pillars of the plan -- promoting intra-African trade and industrialization and export development -- will support the process of economic diversification and trade openness singled out as key for attaining and sustaining growth, he said.

With the pillar of promoting intra-African trade, the bank intends to expand African trade by raising the share of intra-African trade which has remained very low at 15 percent of total trade, said Fofack at the opening ceremony.

According to him, Africa's GDPgrowth in 2017 is projected at about three percent. Africa's growth is largely driven by a number of countries which are drawing on public investments in infrastructure to expand output and taking advantage of windfalls from oil prices.

"Ongoing efforts to deepen regional economic blocs within Africa offer tremendous opportunities to draw on economies of scale to transcend the natural and environmental constraints imposed by its geography. The benefits of integration are not questionable," Rwanda's Minister of Finance Claver Gatete said.

He said the growth of African industries supported by industrialization and intra-African trade will go a long way to expand the tax base, improve economic management and living standards of the population throughout the continent.

Although Africa's trade has witnessed remarkable growth, especially over the last two decades, rising from 210 billion U.S. dollars in 1996 to 1.2 trillion U.S. dollars in 2015, its share of global trade has barely changed, according to statistics from Rwanda's ministry of finance.

At the same time, despite the relative improvement observed over the last decade, intra-African trade has remained very low, at about 15 percent against 67 percent in Europe, 53 percent in Asia and about 37 percent in America, said Gatete.

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