THE International Trade Centre (ITC) estimates that trade between Africa and the Caribbean has the potential to reach US$1,8 billion annually by 2028.
This was highlighted by ITC executive director Pamela Coke-Hamilton during the Afreximbank 31st Annual Meetings and 3rd AfriCaribbean Trade and Investment Forum underway in Nassau, The Bahamas.
"Challenges like climate change, which bears down on us daily, putting current and future generations at risk," she said.
"Challenges like supply chain disruptions, or food insecurity, or environmental degradation, or the COVID-19 pandemic’s aftermath, all of which can undo years of economic progress in short order.
"But if we are going to tackle these challenges head-on, we need more trade and investment between Africa and the Caribbean. That’s what can make economic transformation possible, and in a way that benefits both regions by drawing on our shared ties, hopes, and potential.
"ITC’s newest research with Afreximbank shows that trade between Africa and the Caribbean holds enormous potential—US$1,8 billion for goods and services annually by 2028, to be exact.
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"But we have a long road ahead of us if we’re going to actually achieve that potential in practice, because getting to that number means getting rid of all trade frictions and getting investments into the right sectors."
She noted that the past decade alone, shows that the share of African exports that goes to the Caribbean had been decreasing.
"Today, less than 0,1% of African exports go to the Caribbean, and less than 3% of Caribbean exports go to the African continent," Coke-Hamilton noted.
"And looking past sheer volume, we can also see those exports, in either direction, remain far too concentrated in just a handful of sectors with little value addition, like unprocessed chemicals and minerals, despite all that these two regions have to offer.
"That is despite the potential that we see in exports like machinery, electricity, plastics, rubber, processed food products, and mineral products. Too often, it’s high tariffs and non-tariff barriers that are holding this export potential back.
"What is worse is that these barriers are often more pronounced for those goods that have undergone processing—meaning that value addition, which is critical for better jobs and livelihoods, becomes counterproductive once it’s clear what exporters will face at the border."
She added: "It shouldn’t be that way. And it doesn’t have to be. We must also do far more to boost services trade between the two regions. We already see how trade in travel and transport services are doing relatively well—which, given the extraordinary cultural and culinary traditions our regions have and the beauty of their natural environments, should come as no surprise.
"There’s a clear foundation we can build on. Trade agreements are one way to help bring down barriers and open new opportunities. We’ve already got useful precedents that show us what works and what can be improved, such as the economic partnership agreements in both regions with the European Union."
While there is need to come together to understand what an African-Caribbean trade framework could look like down the line, the two regions must do more to improve economic integration within these two regions themselves, developing value chains further and seeing where the pain points are.
"It is why so many of ITC’s projects in Africa and the Caribbean—whether it’s our new project to support greater food security in the Caribbean or our longstanding projects to develop value chains in East and West Africa—are designed with these goals in mind," she said.
"It is why we have a dedicated programme called One Trade Africa to ensure that small businesses, especially those led by women and youth, can take full part in one of the most transformational trade agreements to be negotiated in a generation—the African Continental Free Trade Area.
Afreximbank and ITC have trained close to 10 000 small and medium enterprises.
"It is why we are launching a new project with the Afreximbank to turbo-charge trade and investment between Africa and the Caribbean," she said.
"Together, we will focus on developing five priority value chains that have major potential for inclusive and sustainable economic transformation, led by the two regions’ small businesses, while tackling food security and other risks we face.
"These are minerals and metals, wood, paper, rubber, plastics, processed food, and animal feed, along with travel, including tourism, and transport."
Coke-Hamilton said poor logistics infrastructure was getting in the way of greater trade both within Africa and the Caribbean and between them.
"Both regions score the lowest on the World Bank’s Logistics Performance Index, and unless we invest more into changing that, then even our best efforts at spurring greater inter-regional trade and investment will be for nought," she said.
The three-day meetings are running under the theme: Owning our destiny: Economic prosperity on the platform of global Africa.