JOHN MARÉ: African trade needs better strategy to drive development

African trade has experienced relatively good growth in recent times, with the gradual implementation of the African Continental Free Trade Area (AfCFTA) being a major positive factor. Nevertheless, the need to improve African trade remains, especially if it is to play its important role in promoting the improved diversification and sophisticated development of African economies. 

Trade remains a key catalyst for development, with tremendous transformative power to help deliver the desired range of improvements in the societies concerned, including economic security, social wellbeing, and employment creation with a broader tertiary sector.

Current practices would suggest that exporting African countries and regions should better manage linkages between targeted intended results and trade flows to improve these results, with a focus on specific priorities. These are multifaceted, complex issues and are directly related to the strategies applied for the various products and different sectors.

Well-devised trade strategies that especially target key sectors and results are required. The overall developmental packages that trade can deliver need holistic approaches, from supportive policy creation to implementation. In this, of critical importance is the mobilisation of multi-stakeholder co-operation, especially that of the private sector.

Similar actions regarding trade-supportive, if often tangential, issues ranging from legal to financial are equally necessary. Such strategies call for increased financial support from all stakeholders into all aspects of a value-added supply chain, ranging from innovative academic activities that co-ordinate with commercial application, to capacity building and outreach.

Among the especially promising economic sectors that can be targeted by African countries for improved trade flows are those related to the increasingly important bio-economy, where multiple good results in the commercial forestry sector already illustrate the great potential that is possible, as well as those in the broader green economy, including those related to clean energy and waste disposal. SA has a bio-economy strategy, as does the East African region, but far more needs to be done to get better results.

Trade related to agriculture and food production remains of critical relevance for Africa, along with activities linked to expanding processing and manufacturing generally. These also deserve improved attention. The SA Business Council recently called for proper implementation of the Agriculture and Agricultural Processing Master Plan, yet this seemingly lacks specifics regarding trade strategies.

Improved African trade strategies relating to natural resources such as minerals seem to be needed, especially if compared with the new, targeted strategy of the EU to get a stable supply of so-called “critical minerals”, where local processing and benefaction are of paramount relevance for Africa.

Growth of the African digital sector, also related to the green economy, could be better synergised with application to various other sectors and improving trade, where in addition to its own relevance it can help provide needed intangible infrastructure for improved trade rollout, including improved regulatory frameworks for good governance generally.

Trade strategies must increasingly help drive and utilise SA’s international relationships, with special focus on chosen important economic partners. In this context innovative trade and economic diplomacy can focus on chosen sectors and economic issues in parallel with broad trade agreements, which need more capacity and time.

Implementation of the AfCFTA and strong economic partnerships within Africa, along with the established economic ties with the EU and UK, remain of special importance. That said, those with the EU seem particularly underutilised given the complex, sophisticated nature of the EU economy as well as the activities related to managing its trade relations, which offer both good opportunities and examples of trade strategies and actions. SA must also give urgent attention to developing improved formal trade ties with members of the BRIC grouping.

An opportunity was missed in early 2024 when the Belgian EU council presidency hosted the latest meeting of the ministerial forum between the EU and the countries of the Indo-Pacific region. SA did not attend, despite being one of the traditional geopolitical gateways to the Indian Ocean region, together with Southeast Asia in the east.

SA has no trans-Indian Ocean trade agreements and could utilise such forums, as with those of the Indian Ocean Rim Association (Iora), to pursue new trade opportunities, including those focused on priority sectors. In this case it could have leveraged enhanced results by the involvement of the EU, given that it is the only African country that has a strategic partnership agreement.

The ministerial forum in January helped fuel the success of the recent visit by the Hungarian foreign minister to Southeast Asia, where he announced that the incoming Hungarian EU council presidency saw strengthened EU-Asean trade as a priority.

In helping upscale Africa’s trade strategies and their implementation SA’s strong and sophisticated economy gives it an especially good basis to help lead in improving the nature as well as the volumes and spin-off results of Africa’s trade, thereby building on its previous leadership actions such as those regarding the AfCFTA. These are issues where SA can better use its positioning to give new needed leadership, and this should be among the priorities of the new government of national unity.

SA, as with Africa more broadly, needs an expanded scope and reach for its trade in what should be a reinvigorated, more sophisticated, targeted economic/trade strategy inclusive of selected priority sectors.

Improving the dialogue surrounding African trade will help the continent's economy achieve greater multidimensional resilience, autonomy and security, strengthening Africa's position in the multipolar global community. This will strengthen African capacities to better engage in international trade and investment deals, with positive spin-offs for itself and ultimately the global community.

The changing international context of Africa’s trade now includes shifts from the initial post-1945 global economic order, with new dimensions relating to trade governance and a plethora of emerging issues, providing both challenges and opportunities. If Africa does not better engage in trade, as with other matters, it will lose opportunities to contribute towards the new system in ways that are beneficial to the continent.

Trade liberalism is not the only answer, but improved engagement between Africa and its trade partners can lead to innovative mutually satisfactory multi-formats of economically beneficial trade priorities for both.

• Dr Maré, a former SA diplomat, is an adviser on international public affairs and diplomacy.