- Sunday Umoren said Africa can harness the $3 trillion opportunity of the AfCFTA through improved intra-country trade
- He said low intra-country trade is due to factors like flawed trade policies and poor infrastructure and logistics
- Umoren added that the blue economy requires investments such as 100 ships to facilitate freighting within the continent
The Secretary General of the Memorandum of Understanding on Port State Control for West and Central African Region (Abuja MoU), Captain Sunday Umoren, has said Africa needs to improve intra-country trade to harness the $3 trillion Gross Domestic Product (GDP) opportunity created by the African Continental Free Trade Area (AfCFTA) agreement.
Umoren stated this at the weekend during the Nigerian Association of Master Mariners (NAMM) 's third quarterly paper presentation.
He noted that intra-African trade is still low and attributed this to a number of factors like flawed economic and trade policies, poor infrastructure and logistics, among others.
Umoren added that with inadequate financing, the AfCFTA agreement presents an opportunity to change the narrative and enhance the economy of African countries.
He said, “A lot of work has been done on the identification of salient factors that are responsible for low intra-Africa trade level and they include flawed economic and trade policies; majorly being producers of raw materials with lack of refining and finished goods and thus our raw materials are shipped to countries where they are turned into consumable goods that most African countries will later import; poor infrastructures and logistics; manufacturing of low-quality products as compared to the quality from Europe and Asia; constraining geographic and climatic conditions; limited diversification of the economies; high cost of production and thus high cost of goods produced in Africa; the production of low‐cost and globally uncompetitive goods and services and limited integration of African societies/countries.
“Of great negative impact is the inadequacy of financing mechanisms and related financial health of most African countries which are laden with debts and thus sister-countries will prefer customers that are more fluid and able to pay or enter into some facility arrangement on the basis of balancing their trade.
“AfCFTA presents an extraordinary platform and opportunity to breathe life into the almost non-existent or comatose intra-African trade with consequent positive economic development. Trade can only thrive when the commodities can be moved (distributed) from the seller/producer/manufacturer to the demander/consumer /user. This movement involves freight transportation by various modes including vehicles, rails, ships, aircraft and trucks.
“With the many littoral countries in Africa (38 coastal and island states, 13 million square kilometres of exclusive economic zones and over 47,000 km of coastline), maritime sector transport will present unimaginable potential to facilitate trade and regional integration across the continent.”
Africa needs 100 ships to freight goods
On the opportunity available for the blue economy, Umoren said Africa needs about 100 ships to participate in the freighting of goods within the continent, which calls for substantial investment in maritime infrastructure and services
He noted that the AfCFTA agreement, with a potential combined GDP of $3.4 trillion, is expected to increase intra-African freight by 28 per cent and demand for maritime freight by 62 per cent when fully implemented, among other opportunities.
Umoren said, “The African Union has indicated in its report that intra‐African trade stands at around 10 per cent compared to 60 per cent, 40 per cent, and 30 per cent intra‐regional trade of Europe, North America and ASEAN, respectively. It is presumed that AfCTA will improve the ratio to 20 per cent through cross‐border trade.
“The United Nations Economic Commission for Africa projects that implementing the AfCFTA could double maritime freight from 58 to 131.5 million tonnes. With the current tonnage, the surge in demand would require much more tonnages and, thus, substantial investment in maritime infrastructure and services.
“A significant increase in traffic flows is expected across all transport modes throughout Africa in the coming years. Enormous investment in transport equipment and infrastructure will be required, including 100 more vessels, if the AfCFTA is fully implemented. The investments expected due to the AfCFTA also provide an avenue for a green economic recovery in Africa.”
Nigeria aiming to be a leading global fish exporter — Oyetola
Meanwhile, TheRadar reported that Nigeria is striving to become a major exporter of fish, according to Adegboyega Oyetola, the Minister of Marine and Blue Economy.
This strategic initiative was unveiled during the 39th Annual National Conference and General Meeting of the Fisheries Society of Nigeria, where Oyetola represented President Bola Tinubu.
