Intra-Africa trade key to boosting African economies

By David Agba
Abuja

While international trade agreements such as (African Growth and Opportunity Act) AGOA and the recently announced Economic Partnership Agreement between European Union and Southern Africa are positive for the continent and should be encouraged, more emphasis is required on trade partnerships between African countries to drive seamless intra-Africa trade.
This is according to the Managing Director of DHL Express Sub Saharan Africa, Charles Brewer, who said that while progress is slowly being made, insufficient trade agreements exist in order to encourage and drive intra-Africa trade.
He said that African countries desperately need to start trading amongst themselves, and that the push for trade agreements should therefore not only be with international trading partners, but amongst African countries too.

The DHL Global Connectedness Index revealed that Africa is the world’s least connected continent, when considering the ease of moving people, trade, information and finance.  All African countries should therefore be focused on developing connectedness on the continent and building trade relationships. From a DHL standpoint, we are focused on making logistics more accessible and connecting Africa, which has resulted in the expansion of our retail footprint to over 3300 outlets in less than 3 years,” adds Brewer.
When comparing intra-regional trade statistics, Africa rates amongst the lowest, with less than 20 per cent of what is produced in the region staying within the region. This, in essence, means that over 80 per cent of what is produced in Africa is exported, mainly to the EU, China and the US. By comparison, 60 per cent of Europe’s trade is with its own continent, and in North America, the figure is 40 per cent.

As is well documented, one of the region’s biggest challenges in terms of realizing its trade potential is under developed infrastructure, but Brewer says that this is slowly improving as several Africa regions continue to invest large amounts of capital into infrastructure development.
Brewer notes that while progress on infrastructure development and investment should continue, a push now needs to be made by African countries towards developing and implementing trade agreements which will encourage trade between the regions.

Paris Auto Show: Fiat to adjust R 500, core brand
While rivals roll out new models and concept cars, Fiat (FIA.MI) has little to show at the Paris auto show besides another variant of its retro-styled 500 compact car, in what is starting to look like a worrying trend for the carmaker’s namesake brand.
Following the full takeover of U.S. unit Chrysler, the newly-named Fiat Chrysler Automobiles (FCA) has set out an ambitious growth plan focused on its upmarket Alfa Romeo, Maserati and Jeep brands.

Analysts say it makes sense to concentrate on higher-margin premium vehicles that are selling strongly in the United States and emerging markets, but are concerned the group is neglecting a Fiat brand which still accounts for a large chunk of sales.
FCA sold 1.5 million Fiats last year, with deliveries of the mass-market brand accounting for 34 percent of the group total.
The 500X debuting in Paris should help lift sales by adding to the popular mini-SUV category. But the crossover car is unlikely to significantly change the face of Fiat’s core brand, starved of models and stuck with an ageing line-up.
“The 500 is getting older and older, the success of its variants has been limited and they lack a competitive offering at a time when Volkswagen (VOWG_p.DE), Peugeot (PEUP.PA) and Renault (RENA.PA) continue to launch new cars,” said Sascha Gommel, an analyst at Commerzbank. “Even if the European recovery was gaining momentum, Fiat would definitely lose out.”