Prof David Luke, professor of Practice and strategic director of the Firoz Lalji Institute for Africa, gave a thought-provoking public lecture at the North-West University (NWU). The public lecture was hosted by the TRADE research focus area on the Potchefstroom Campus.
In his lecture Prof Luke emphasised the importance of regional trade and economic integration to Africa’s development. He stressed the necessity for African countries to trade more with one another rather than relying largely on external markets by drawing on lessons from a book he had edited, How Africa Trades.
Prof Luke began his lecture by providing an overview of the current status of trade in Africa. He pointed out that trade in Africa is still far less than that with outside partners like China and the European Union (EU). He cited research from the book to demonstrate that although African nations export minerals and fossil fuels to the rest of the world, most of the trade between African countries consists of manufactured goods and food products.
“Africa accounts for only about 2,3% of global trade, which is far below its potential. What we need is to increase trade among ourselves and move away from over-reliance on commodity exports,” said Prof Luke.
Prof Luke went on to discuss how external trade policies affect Africa, stressing that deals with big economies are often to the disadvantage of African countries. He cited the various trade agreements the EU had with African nations, which disrupt the continent’s attempt at economic integration, creating a disadvantageous environment.
“The fragmentation of trade agreements means that Africa is not speaking with one voice. This makes it difficult to negotiate favourable terms in the global trade system,” Prof Luke stated.
One of the key issues raised was the historical dependence of Africa on external markets, such as the EU and China, for exports and imports. According to Prof Luke, China has surpassed individual European countries as Africa’s top trading partner, but the EU as a whole continues to be the continent’s top commercial destination. In addition, he also explained that although Africa imports more goods from these regions, intra-African trade remains minimal in comparison.
Prof Luke championed the African Continent Free Trade Area (AfCFTA) as a revolutionary approach to increasing intercontinental trade. He argued that the AfCFTA could greatly reduce trade barriers, integrate regulations and establish a single market if it were properly implemented.
“The AfCFTA is our best opportunity to integrate our economies and strengthen regional value chains,” he stated. “But for this to work, we need commitment from governments and a strong focus on reducing trade barriers, customs inefficiencies and infrastructure challenges.”
A call to action
Prof Luke made a call to action at the end of his talk, urging African policy makers and business leaders to grant first priority to trade policies that support regional integration.
“If we do not take bold steps now, Africa will continue to lag behind in global trade. It is in the world’s interest, and certainly in Africa’s interest, to create a new trade deal that prioritises our own growth.”
