Regional integration is key to growth in Africa
African leaders have been urged to trade more with each other at a side event ‘Accelerating Growth in the Malawi-Zambia-Mozambique Growth Triangle’, which took place during the African Development Bank’s annual meetings in Lusaka. “Africa has to trade more with Africa to accelerate economic growth, create jobs and reduce poverty,” said Tom Pengelly, Managing Director of the Saana Institute, a UK-based consultancy that has developed a new trade programme in the region for the UK Department for International Development. “For Malawi, Mozambique and Zambia, expanding trade could begin at home, with the regional market.” Industrialisation is one of African Development Bank President’s ‘High 5’ priorities for transforming Africa, however while Malawi, Zambia, and Mozambique are said to have strong trade links and produce goods and services needed by their respective neighbours, the case study served to highlight the gulf that exists between international and regional trading across the continent. The total value of trade between Malawi, Zambia, and Mozambique increased 36 percent between 2011 and 2015, but this still represents less than 1 percent of the US$335 billion that is generated collectively through their dealings with the rest of the world. And while the event focused on the positives to emerge from reforms that have reduced border transit times, there were calls for deeper regional integration. “Greater collaboration will improve the business environment, enabling growth that benefits both the regional economy and its citizens,” said Linda Aaslien, Director of International Development at AECOM, a global infrastructure services company and co-organiser of the event with the Saana Institute. Significant trade from landlocked Malawi and Zambia already passes through Mozambique’s sea ports but physical infrastructure continues to ensure that the cost of trading remains high. Nevertheless, Zambia ratified the World Trade Organisation Trade Facilitation Agreement as recently as December last year, and Malawi is also close to ratification as both countries pursue improved policy environments. These, and other steps to overcome soft infrastructure barriers are seen as being vital in reducing transit times within regional value chains, by helping markets to drive down costs and achieve the scale needed to make good on the African Development Bank’s pledge to create 25 million new jobs for Africa’s youth.
By Adam Pitt
Photo: Julien Lagarde