October 11, 2010

Trade Within African Borders, and the Infrastructure it Requires

Obiageli Ezekwesili, Vice President for Africa at the World Bank has posted commentary on a meeting she recently attended called "Can Africa Trade with Africa?" in which leaders agreed that more should be done to promote intra-continental trade.

Ezekwesili noted that "intra-Afriacn trade remains among the lowest in the world - only about 10% of African trade is within the continent, compared to about 40% in North America and about 60% in Western Europe." Discussion seemed to focus on political solutions to this issue, with a push to increase communication and collaboration between states and organizations to promote growth.

However, it was interesting to note some comments from the private sector that were brough up during the meeting. According to Ezekwesili, the President of Coca Cola in South Africa pointed out that they would "only need about half of the current 163 plants in Africa if internal trade barriers were removed and transport services were improved." The opportunity for infrastucture development (and the firms that profit from it) is clear. If there is an economic opportunity for private sector firms to benefit from investment in infrastructure, they will be willing to pay to help that infrastructure develop. This in turn helps the firms that are contracted to build the necessary roads and facilities, and decreases the cost of doing business in between African nations.

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