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EXPORT SIMILARITIES CONTRIBUTE TO LOW INTRA-COMESA TRADE

Summary

The export similarities between member states is said to be a major contributor to the low intra COMESA and COMESA – rest of Africa trade.

Updated on : 09-11-2020


EXPORT SIMILARITIES CONTRIBUTE TO LOW INTRA-COMESA TRADE

According to findings presented at the recent COMESA Annual Research Forum, the current export structure depicts a region that produces more or less similar products in terms of their export sophistication.

The top five exports to Africa include tobacco and tobacco substitutes, ores, slag and ash, essential oils and resinoids, sugars and sugar confectionery.

Mineral fuels and related products are among COMESA’s top exports to the rest of the world (TradeMap, 2020).

In a research paper titled; ‘Estimating COMESA’S trade potential in Africa: optimizing export opportunities in the AfCFTA’, the Researcher Manaseh Oiro, observed that similar products were being exported to the rest of the world in larger quantities because they are used as inputs for industrialised countries.

To address this, Oiro said COMESA member states should embark on implementation of the region’s industrialisation strategy, which is aimed at improving trade complementarity among member states.

“This can be achieved through structural transformation, particularly enhancing value addition such that member states trade in value added products and move away from exporting raw materials and minerals to developed countries,” Oiro stated when he presented his paper at the  seventh COMESA Research Forum conducted recently.

The study set out to establish the drivers of COMESA’s trade with the rest of Africa, to provide solutions to boosting the region’s share of exports within the continent. The five top exporting countries in COMESA were selected and a further five non-COMESA countries used to estimate the trade potential within the African continent.

The study found that intra-COMESA exports were 112 per cent below its average exports to the rest of African countries. Based on the analysis, COMESA’s exports to other African countries were worth US$146.9 million while average exports were worth USD 69.3 million. The region’s efficiency in exports was found to be low at 47.1 per cent.

Trade between the following bilateral partners were used to estimate trade potential in this study. Kenya and Nigeria; Ethiopia and South Africa; Egypt and Morocco; Zambia and Namibia; and Democratic Republic of Congo and Senegal.

It was established that the exporting country’s population, market size of the trading partners as proxied by GDP, tariffs and export diversity were important in explaining COMESA countries’ exports to the rest of Africa.

The Researcher recommended for the establishment of a strong monitoring an evaluation framework at the COMESA Secretariat for implementation of the regional industrialisation strategy.

“A holistic approach needs to be taken to address this, right from the curriculum in institutions of learning to on job training and the overall economic development policy,” he said.

He added that there is need for harmonisation of policies across Member States, especially the macro-economic and legal and regulatory environment to ensure that economic growth catalyzes trade within the region. Tariff  liberalisation also needs to be accompanied by elimination of restrictive or discriminative non-tariff measures for the liberalisation effort to have an impact.


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