Last month, Standard Bank economist Jeremy Stevens noted to Business Live, a major South African publication, that “South Africa lags China in trade with the rest of Africa.” He stated that while trade between China and South Africa’s fellow African nations has expanded sixteenfold since 2010, trade between South Africa and the rest of the continent has only expanded threefold during Africa’s best economic decade in memory.
While some have potentially exaggerated the negative effects of Chinese investment on the continent, discounting the stimulative role of Chinese infrastructure and the massive influx of goods and services that have arrived in Africa, this measure still serves as a benchmark for the unrealized benefits that are available in encouraging future regional cooperation. According to Stevens, “Most worrying, [South African] commercial engagement remains geographically limited, resting predominantly on SACU [Southern African Customs Union] and select SADC (Southern African Development Community) states at the expense of larger, faster-growing economies in West, North and East Africa.”
In fact, South African president Jacob Zuma has stated that only 10 percent of African trade is between its states. The African continent, as a whole, is still broken up into several Regional Economic Communities (RECs), limiting the potential developmental return from the flow of goods and people.
Encouraging Intra-Africa Trade
African leaders have recognized this issue, and begun to seize the opportunity that it entails. The African Union intends to implement a plan that would reach completion in 2018, merging economic zones across the continent gradually in the years to come, with the aim of establishing a continent-wide trade bloc worth over $1 trillion and comprising approximately 590 million individuals. According to the Irish Times, while there are visible difficulties that can be predicted, the three largest trade blocs in Africa could be merged as soon as 2014.
There are obvious economic benefits from such a transition. When asked about what impact a regional trade bloc like ECOWAS (Economic Community of West African States) has had on both his country and other success stories such as Ghana, Ogabe Oche, the director of Research and Studies for the Nigerian Institute of International Affairs, emphasized that “with the integration of the region, ECOWAS provides a wider market for the economic expansion of both countries. Given its protocols on trade and investments [and the] free movement of persons and residence… the region provides so much opportunity for the economic expansion of the two countries.“
Yet the benefits inherent in greater co-operation, it should be emphasized, are not only economic. Institutions such as ECOWAS and the AU have had great success in maintaining relative stability after destabilizations have occurred in countries like Sierra Leone, Guinea Bissau, and more recently in Somalia. Greater economic interaction creates a sense of interdependence and responsibility for maintaining the well being of the region. This is something that will be critical for long-term, stable African development.
Lastly, it should be stated that while China, India, Brazil, the U.S., and other countries can be seen as reliable partners in what is becoming the African economic renaissance, who all have something to contribute to the process, it is likely that these powers will always have other motives besides the well-being of people living in nations throughout Africa. In the interest of keeping African individuals as the major beneficiaries of African development, it is wise for local leaders and populations to rely on other people that have the greatest stake in the stability of the region. Only in this way can African nations guarantee that the interests of local individuals will be protected, as this transition occurs, over the long run.