Border closure: Congo overtakes Nigeria in intra-African trade
The Democratic Republic of Congo has overtaken Nigeria, Africa’s biggest economy, to become the second-largest intra-African trade economy, a new
The Democratic Republic of Congo has overtaken Nigeria, Africa’s biggest economy, to become the second-largest intra-African trade economy, a new report by the African Export-Import Bank has shown.
Nigeria’s land borders have been closed to its West African neighbours for more than a year as part of efforts to check smuggling of contraband into the country. A partial closure was initially done in August 2019.
The 2020 African Trade Report said the value of total intra-African trade fell by 5.23 percent in 2019, reducing its overall contribution to overall African trade from about 15 percent in 2018 to 14.4 percent in 2019.
It said South Africa maintained its position as the largest intra-African trade nation, accounting for 23.1 percent of total intra-African trade in 2019.
Afreximbank said DR Congo consolidated its position as a major contributor to intra-African trade, recording an increase of 10.4 percent in total trade with the continent to emerge as the second largest intra-African trade economy in 2019.
“Despite declining by 4.7 percent, Nigeria’s share of intra-African trade remained constant at about 7 percent and Nigeria emerged as the third-largest intra-African trade country,” it said.
According to the report, Africa remains overly dependent on export of raw commodities, with oil and gas accounting for over 37 percent of total exports.
The report highlighted the importance of informal cross-border trade for generating employment and income, saying “it serves as a source of income for about 43 percent of Africa’s population and is dominated by women”.
In West Africa, food and agriculture products accounted for 30 percent of intra-regional trade, the report said.
“Even though ICBT accounts for a significant proportion of domestic absorption and has become a major source of income for consumption smoothing, its contribution to GDP is hardly recognised,” the President of Afreximbank, Prof. Benedict Oramah, said.
The report said Africa’s merchandise trade contracted by 12 percent in the eight months to August 2020 compared to same period last year, with April and May emerging as the period witnessing the largest contractions.
“The outlook for 2021 is positive and Africa’s trade is expected to rebound strongly in 2021 as global economic activity picks up and demand for African exports increases,” it added.
