Roundup: Intra-regional trade potential key to boosting African economies

Despite an average annual growth in exports of 8.5 percent since 2010, intra-regional trade opportunities remain to be tapped in Africa, according to the Africa Economic Outlook Report 2016 released on Wednesday.

Trade between African regions remains low when compared to other parts of the world, said the report.

Intra-regional trade accounted for 16 percent of Africa's total trade in 2014 -- with manufactured goods accounting for 60 percent of total regional trade, according to the report.

The report noted that intra-African trade has not yet reached its full potential.

The Gross Domestic Product (GDP) of major Sub-Saharan African cities, including Johannesburg, Cape Town, Lagos and Luanda, are expected to increase, the report said, citing the quality of infrastructure and logistics as key contributing factors.

Commenting on the report, Hennie Heymans, CEO of DHL Express Sub-Saharan Africa, said, "There are multiple opportunities to increase intra-regional trade, especially in line with the Tripartite Free Trade Agreement."

If used properly, this agreement has the potential to significantly boost economic growth in the region, he said.

"These findings demonstrate the important role that effective logistics play in boosting a country's economic growth by enabling trade," said Heymans.

For countries looking to boost inter-regional trade, it is vital to consider the time and costs associated with transporting goods, according to Heymans.

"It is important to take a holistic approach when it comes to managing supply chain risk, in order to achieve greater visibility, flexibility, and control. Businesses in Africa are under increasing pressure in the current economic climate to remain competitive, both locally and globally, and sometimes lack the ability to build resilient supply chains," he said.

According to Heymans, making strategic decisions to outsource logistics can make a significant contribution to a business's profitability.

"Always ensure that you have the right partners who understand the global economy and, more importantly, the intricacies of doing business in each individual African country. It's not a one size fits all approach," he stated.

Home to one of the fastest growing middle classes in the world, Africa is a captive market, filled with consumers who are looking for variety and easier access to goods.

"The market is there, it's about getting the right goods to the right people, at the right time," Heymans said. Endit