IEA – World Bank Conference on “New Thinking in Industrial
Policy: Implications for Africa”
Johannesburg, South Africa 3-4 July 2012
Dominique Njinkeu
Content
African Trade in industrial Products
I.
1.
2.
Pattern
Salient features of the New Global Trade order
II. Securing markets for African products
1.
Regional integration
2. Bilateral trade agreements: EU, US, emerging markets
3. Multilateral trade rules
III. Complementary Actions
1.
Beyond tariff: Non-Tariff Measures agenda
2. ICT-enabled services agenda
3. Connect to Compete: trade facilitation agenda
Introduction
 Industrialization has been associated with trade
liberalization and some form of support
 The traditional sequence :agriculture to pre-industrial
stage, to industrial production and to mass
consumption is no longer the rule
 African trade policy increasingly at regional level
 Agglomeration for Africa considered at the regional
level
 This has implications on how Reindustrialization in
the new global order will be shaped in Africa
Characteristics of African trade
Intra vs trade with ROW (in Billion USD) and by share
Intra-African exports
Sectors
Agriculture
and food
Primary
Manufacture
Other
Total
2000
Value * Share
2.57
5.01
6.58
0.19
14.35
17.9%
34.9%
45.8%
1.4%
100.0%
2010
Value * Share
9.98
21.15
25.30
2.33
58.76
17.0%
36.0%
43.1%
4.0%
100.0%
Intra-African Imports
2000
Value * Share
2010
Value * Share
Sectors
Agriculture
and food
3.07
17.8%
10.17 16.6%
Primary
5.82 33.7%
23.36 38.0%
Manufacture 8.27 47.9%
27.60 44.9%
Other
0.12 0.7%
0.27 0.4%
Total
17.28 100.0% 61.41 100.0%
*= Values are presented in Billion USD
Sources: compiled from UNCTAD, UNCTADstat
African exports to RoW
2000
2010
Sectors
Value * Share
Value * Share
Agriculture
and food
12.21
9.1%
33.01
7.6%
Primary
81.95
60.9% 295.08 68.0%
Manufacture 37.16
27.6% 96.39 22.2%
Other
3.19
2.4%
9.38
2.2%
Total
134.50 100.0% 433.87 100.0%
African Imports from RoW
2000
Sectors
Value * Share
Agriculture
and food
14.41 9.9%
Primary
87.42 59.9%
Manufacture 39.57 27.1%
Other.
4.48 3.1%
Total
145.88 100.0%
2010
Value * Share
34.12
314.94
98.10
16.96
464.12
7.4%
67.9%
21.1%
3.7%
100.0%
Figure 1: Intra-African export and import trends over the period 2000-2010
Sources: compiled from UNCTAD, UNCTADstat
Figure 2: Intra-African trade composition (exports and imports) by main sectors (2000-2010)
Intra-African Exports
60%
50%
Agriculture and food
40%
Primary
30%
Manufactured
Others
20%
10%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Comparison of the compositions of intra-African trade and Africa’s trade with the ROW
in 2000 and 2010
Sources: compiled from UNCTAD, UNCTADstat
Variation of African import shares to Africa and to the ROW in 2000 and 2010
Sources: compiled from UNCTAD, UNCTADstat
Level of intra-regional trade
Regional intra-industry trade: Africa behind
North America
Western Europe
Southeast Asia and Pacific
Northeast Asia
Eastern Europe
South America
Central America and Caribbean
Western Asia
Eastern Africa
Central Africa
Central Asia, Caucasus and Turkey
South Asia
Northern Africa
Western Africa
Southern Africa
0
0.1
0.2
0.3
0.4
0.5
0.6
I.1 Trend in African trade
 Intra-African trade: 12 % total trade in 2010.
 Intra-African trade composition
 More sophisticated manufactures trade: Intra-
African exports in manufactures over 45%
 Agriculture and food only 15% despite the huge
potentials: exploit potential linkages between
agriculture and industry, including in high value
added trading activities.
I.1 Trend in African trade
Trade with ROW
 Main trade category: manufactured goods (16.7%),
machinery and transport equipment (11.6%),
chemicals and related products (9.6%).
 The primary commodities trade: crude materials
except fuels (6 per cent) and mineral fuels, lubricants
and related materials, which account for 30 per cent.
 Growth linked to market access opportunities offered
under initiatives such as AGOA and “Everything but
Arms”.
I.2 Lessons from African growth
 Growth experience: extremely varied and episodic,
particularly in large countries.
 Low productivity growth: Africa yields less than half
the return measured in growth terms compared to
other developing regions: reducing transactions costs,
supporting innovation; and improving skills and
institutional capacity.
 Poor and erratic policy and governance account for
between one-quarter and one half of the difference in
predicted growth between African and non-African
developing countries.
I.2 Lessons from African growth
 Geographic isolation and fragmentation, and
insufficiently diversified production and trade: 1/3
growth gap with other developing countries.
 International trade: reduced barriers to trade and
strengthened capabilities for international.
 Demographic transition : 2/3 observed difference:
growth labor force and employability of youth.
Consequence: Improving the investment climate,
more and better infrastructure ,innovation (ICT
and skill formation), institutional capacity
I.2 Features of current Global Order
 Production broken down into tasks by plants located
in countries with relative prices of factors of
production: distant sub-contracting arrangements
with foreign firms becoming a norm
 Ability to adopt and improve upon existing
technologies : partnerships programs for training from
cutting-edge high-tech institutions, incentives for
experts to retire or migrate to set up globally
competitive enterprises in Africa.
I.3 Features of current Global Order
 Excellence in international service trade: network of
think tanks and R&D institutions to generate cutting
edge knowledge and nurture a new culture and work
ethic of innovation, high-quality decision making, and
product excellence.
 Nurture a vibrant domestic export industry through
policies promoting high-tech and high domestic
value-added industries.
I.3 Features of current Global Order
 Production of sophisticated goods generate positive
externalities via learning-by-doing especially coupled
with government assistance consistent with country’s
comparative advantage
 To reap economies of scale, manufacturing needs to be
concentrated and a particular location requires a
minimum level of industrial agglomerations
 Trade in tasks are highly transport-intensive hence
needed attention to efficient trade facilitation and
modern telecommunications.
I.3 Lessons as Ingredients for African
industrialization
 Production of sophisticated goods generate positive
externalities via learning-by-doing
 Some export goods have higher spillover effects than
others
 Comparative advantage: avoid “comparative advantage
defying strategies”.
 Increasing trade of intermediate goods and services
produced in plants located in several countries and
often belonging to the same firm
 Agglomerations to reduce costs and be competitive
•
•
•
1. Regional integration
2. Bilateral trade agreements: EU, US, emerging markets
3. Multilateral trade rules
II. 1Regional integration agenda
 Towards a Continental FTA: timeline
1. Tripartite: 2017
2. West Africa: vision 2020
3. Central Africa: CEMAC 2025
 Bilateral trade agreements: Align timeline to above
USA: AGOA: third country fabric (2012), AGOA
expiry (2015)
2. EU: December 2013 (Interim EPA)
3. WTO: EBA
1.
II.2 Proposals for AGOA
 Third country multi-fiber provision beyond the new
sunset period determined for AGOA itself.
 Stability and predictability e.g. 10 years, together with
the establishment of benchmarks.
 Broaden coverage: tobacco (Malawi), peanuts
(Gambia), groundnuts (Zambia), dairy products
(Kenya) and meat products (Botswana).
 Incentive package to spur U.S. FDI particularly for
non-energy and non-extractive raw materials
 System of sanctioning errant countries without
hurting other economies to which they are tied
II. 3 Consolidated trade regime to
concentrate on CFTA
 Coordination of ongoing discussion at AGOA, EPA,
WTO with an extension of current trade regime for a
fixed period aligned with REC and CFTA liberalization
timelines ( 2025?)
 Extent the above to emerging countries
 At WTO aligned all countries in African RECs to the
LDC trade regime
 Focus on a CFTA rules of origin regime that would
enable trade with developed and emerging countries:
AGOA RoO could serve as a model
Complement trade rules
with actions to enhance
competitiveness
III.1 Connect to compete: trade facilitation
Institutional Environment
Along corridors Think and Act
holistically
•
The Transport corridors link a gateway to
an inland terminal:
– Physical infrastructure (ports, roads,
Gateway
Landlink
Inland
Terminal
railways, dry ports)
– Logistics services
– Procedures (notably transit)
•
Institutional environment:
– Articulation of regional, corridor and
national levels
– stakeholders engagement
– policies
•
Monitoring & Evaluation
Monitor and improve
– corridor performances
– identification of non tariff barriers to
address through policies / operational
measures
III.1 Connect to compete : Gateways
 Douala for Cameroon, Chad and CAR; Congo
Brazzaville, Equatorial Guinea and Gabon
 TEMA for Ghana and Burkina Faso, Mali, Niger
 Dakar - Bamako
 Durban and North-South Corridor
 Role of African Alliance for Electronic Commerce
comprising most SW in Africa: Morocco, Tunisia,
Senegal, Cote d’Ivoire, Ghana, Cameroon, Gabon,
Madagascar, Mauritius, ….
III.1 Connect to compete : Single
Windows
Missions
External Trade Transaction
Objectives
Reduce cost and delays in clearance
27
III.2 Connect to compete : corridors to
Inter-connect landlocked to sea
 Mombasa :Kenya, Uganda, Rwanda, Burundi and DRC
 Dar-es-Salaam :


(1)Tanzania, Rwanda, Burundi, Uganda and DRC
(2), Tanzania, Zambia, DRC, Malawi
 Walvis Bay: (1) Namibia, Botswana and South Africa; (2)




Namibia, Zambia and DRC , (3) Namibia and Angola
Douala : Cameroon ,CAR and Chad
Dakar : Senegal, Mali, Burkina Faso and Niger,
Cotonou : Benin, Burkina Faso, Niger, and Mali
WA cost: Cote d’Ivoire, Togo, Ghana, Benin and Nigeria
III.2 Connect to compete : corridors to Interconnect landlocked to sea
INTERCONNEXIONS ENERGIQUES EN AFRIQUE
….ET DU
PROGRAMME DE
POOL
ÉNERGÉTIQUE DE
L’AFRIQUE
CENTRALE (PEAC)
QUI SONT
COHÉRENTS AVEC
LES PROJETS
D’INFRASTRUCTUR
ES DU NEPAD.
Ligne Afrique de l’Ouest
Ligne Afrique australe Ouest
Ligne Afrique australe Est
Ligne Afrique centrale
Ligne Afrique centrale – Afrique du Nord
III.2 Connect to compete: corridor
priorities and actions?
 Despite widely held view hard infrastructure cost
represents a small part of total logistics costs
 Most gains in trade likely from investment in soft
rather than hard part:
 road quality has more impact on delays or predictability
of trade flows than on cost of transportation through
maintenance and fuel consumption;
 infrastructure sustainability given low traffic
 Low reliability of the transit supply chain more
worrisome than average transit time
III.2 Connect to compete: Inter-REC connectivity
CORRIDORS ROUTIERS EN AFRIQUE
Ligne Afrique de l’Ouest
Ligne Afrique australe Ouest
Ligne Afrique australe Est
Ligne Afrique centrale
Ligne Afrique centrale – Afrique du Nord
III.3. Trade in services (Factor mobility)
 Removal of restrictions on free movement of labor:
exchange of information on regulatory regimes,
streamlining immigration processes for business
travelers and workers and temporary residence of
business people
 Experience of regional groupings such as EU or APEC
Business Mobility Group provide practical guidance
 SADC univisa scheme, other RECs should do the same
III.3. Trade in services: Mutual
recognition Agreements(MRA)
Promote Academic and professional qualifications:
 Accreditation of schools or academic programs
 Regional qualification and licensing
 Regional conduct and ethics: standards of
professional conduct and nature of disciplinary
action for non-conformity with those standards
 Professional development and re-certification:
continuing education and ongoing
requirements to maintain professional
certification
III. 4 Non-Tariff Measures
 Applicable to imported and domestically-produced
goods
 Not always bad e.g. regulations to protect local and
global public goods desirable
 Legitimate NTMs imposed in response to market
failure otherwise not allowed by WTO
 Most NTB: customs valuation, TBT, SPS, rules on
import-licensing procedures
 NTB major concern in a small country b/o can be
captured by special interests as they lack transparency
and are complex.
III. 4 Non-Tariff Measures
Most prevailing NTM in Africa
 Cumbersome customs and administrative
documentation procedures;
 Immigration procedures;
 Cumbersome inspection requirements;
 Varying trade regulations within same RECs
 Varying, cumbersome and costly procedures for transit
and verification of imports and export cargo;
 Business registration and licensing.
III.4 NTM in dairy trade in EAC
 Major bottlenecks include:
 Veterinary certificates : Required from exporting
and importing countries and issued separately for
every individual shipment
 Quality analysis: National quality seals are meant
to be sufficient proof of compliance with standards
but every EAC country requires further testing by
own lab or other body
 Ineffectiveness of the National Monitoring
Committees
 Limited dialogue/exchange of information;
regulatory assessments and audits
36
Figure 1: Coverage and frequency ratios
Taux de fréquence
Taux de couverture
UE
Asie
Af. Nord & MO
Amérique Latine
Sénégal
Madagascar
Afrique du Sud
Maurice
Namibie
Kenya
Ouganda
Burundi
100
80
Source : Cadot
60
40
20
0
20
40
60
80
100
Figure 1: Incidence of NTM, # of measures
120.0
100.0
80.0
60.0
Cinq et plus
Quatre types
40.0
Trois types
20.0
Deux types
Un type
0.0
Source des données : World Bank and UNCTAD
III.3 NTM
 In sum
 African countries heavy user
 Note sure what heavy regulatory
apparatus addresses; not consumer
concerns as in developed countries
 Mostly regulatory overkill: streamline
Conclusion: NSE and African Reindustrialization in New Global Order
 Step 1 : Documented African success stories
 Step 2: constraints to alleviate: coherent/ sustainable
policy, skill and technology, NTB, trade facilitation
 Step 3: firm incubation: build capacity of private sector
in international trade
 Step 4: careful about governance; regional approach
adds to complexity
 Step 5: Mixed performance of Africa SEZ; Support
other regional public goods
 Step 6: compensating pioneer firms : complicated
Conclusion: NSE and African Reindustrialization in New Global Order
 Broaden the market space to foster greater
opportunities for scale production, competition,
investment, and trade
 Eliminate existing tariff and non-tariff barriers, bost
trade facilitation reform
 Take into account human and institutional capability
and include a component on stakeholders
empowerment
Conclusion: Summary of main
messages
1.
Trade regimes African countries are subjected to
need to be consolidated and secured to enable focus
on Continental FTA agenda
2. For this consolidation rule of origin under EBA, EPA,
AGOA should be harmonized and aligned to CFTA;
emerging countries should be fully involved… an
agreement in the G20 framework preferable
Conclusion: Summary of main
messages
3. NSE should be considered in the framework of RECs
and the CFTA
4. Support should draw relevant lessons from the past
and the complication associated with using a regional
approach: preference to measures that enhance
competitiveness (trade facilitation, NTM, ICTenabled services) and skills that can be transferred to
other sectors