Africa has no shortage of instruments that could boost trading within the continent. Trade conferences where deliberations centre on opening African markets to African economies have been held year after year for far too long.
The paradox is that even through African countries share borders, they may as well be millions of miles away from each other when it comes to trade. Yet African countries trade in large volumes with European, American and Asian markets, even for produce available in neighbouring countries.
Africa loses mammoth opportunities due to its insatiable appetite to embark on projects that start on paper and end on paper, with little practical application. For instance, there was colour, glamour and pomp on January 13 2022 when the Pan African Payment & Settlement System was launched in Accra, Ghana.
This mirrored the excitement that engulfed East Africa when the East African Payment System was launched in 2014. However, the reality remains that to trade within Africa you have to use the dollar rather than local currencies, even for countries that share borders. The dollarisation of trade in Africa renders local currencies useless.
One would think the advent of the Africa Trade Portal would do the trick to make intra-Africa trade better, but not so. The portal is below par in terms of market information. The quick links on its website do not offer the information they are meant to provide. Often, no information is provided.
Compare that with the Alibaba website, where with a mere tap on a screen you have access to an array of products available from China. It is frequently far easier to access goods from China than it is between neighbouring countries in Africa.
Trade statistics in Africa unmask an appalling situation. In 2023 Tanzania imported 75,000 tonnes of rice from Pakistan, 39,000 tonnes from Thailand, and 18,000 tonnes from India, yet a country it shares a border with through lake and land — Malawi — produces some of the best aromatic rice in the world.
The markets in Tanzania have no umbilical connection to Malawi’s rice producers. Due to a lack of market information Malawian farmers are unable to form co-operatives to sign bulk purchase contracts with markets in Tanzania.
Africa trade is in a dire state. In 2022 SA imported 2-million tonnes of rice valued at $955m, its primary suppliers being Thailand and India. Online freight forwarders Shipa Freight reports that it takes 19 to 34 days to ship rice from India to SA. Paradoxically, one can transport rice from Malawi to SA within three days.
Africa is trade disconnected. Malawi imports textiles from China while Kenya, a two hour flight away from Malawi, has emerged as a heavyweight apparel exporter. Kenya imports raw cotton from Pakistan and France, while close by Benin, Mali, Burkina Faso and Ivory Coast are renowned for their cotton production. They prioritise selling cotton to Bangladesh, Vietnam, China and Malaysia.
Kenya imports wheat from China, India and Italy, though Ethiopia has broken the trend to become the biggest wheat producer in Africa. Namibia is in the elite club of mineral water importers — and it imports much of it from the US while Malawi has vast quantities of underground water. At one point Angola imported 94 tonnes of tomatoes from overseas, when Nigeria and Malawi had a surplus of fresh tomatoes.
If Africa is to trade within herself she needs to be connected with payment systems that exist in the real world, not just on paper. It needs to be connected through the air, land and sea for ease of transportation. The existing air travel system in Africa is chaotic and detrimental to the continent’s trading prospects.
Travelling from Libreville, Gabon, to Bangui, Central African Republic, takes a minimum of nine hours and passengers have to change flights. By comparison, a flight between Paris and Madrid, an equivalent distance, takes two hours and costs five times less.
Malawi shares its largest border with Mozambique, yet to fly from Lilongwe to Maputo, the countries’ capitals, one has to first fly to Johannesburg and change flights. There have been instances where by flying between the neighbouring capitals of Malawi and Zambia, passengers have to fly to Nampula in Mozambique and Nairobi, Kenya, change flights then proceed to Lusaka, taking more than 12 hours. Surprisingly, Lusaka and Lilongwe are just 500km away from each other.
There are directs flights between Morocco and the US, as well as 23 destinations in Europe, yet one would struggle to find five direct flights between any country in Africa and Rabat. Air Cargo Malawi has its freighter hub in Dubai and no footprint on African soil.
The missing link is the information that could be an umbilical connection between markets and producers within Africa. The Holy Grail would be travel connectedness between states. It is trade that will develop Africa, but first trading infrastructure need to be harmonised. The payment systems have to work.
• Achitabwino is founder of BYC International, a training and consulting firm in Malawi.
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