This paper argues that the dramatic changes in the trade architecture of the world during the first decade of the new millennium have created both opportunities and challenges for Africa’s development. African countries need to develop proactive strategies to harness these new changes and use them to advance the integration of the African continent.

The paper looks at the main elements of the changes in the global trade architecture in the first decade of the new millennium. It then explains how these changes impacted on the Doha Development Round. The shift to mega-regionals and mega-bilaterals by the major developed country players and the implications of these developments for Africa’s trade with the world are also briefly discussed. The paper then sets out the changes in the trade policies of the EU and the US on Africa in the new millennium and the implications of these policies for Africa’s economic development. The paper also discusses the role of China in the trade and economic development of Africa and looks at the unfolding regional integration strategy of African countries. 

See Commonwealth Trade Hope Topics Series Issue 131 The changing global trade architecture: Implications for Sub-Saharan Africa's development

Faizel Ismail is Adjunct Professor in the School of Economics, University of Cape Town and a TIPS Research Fellow

  • Year 2017
  • Organisation Journal of World Trade 51, no. 1
  • Publication Author(s) Dr Faizel Ismail
Published in External Journals

Session 5: International lessons

There are huge opportunities for African countries to trade among themselves and invest in each other's economies, but the African market remains fragmented, hampering cross border trade and investments. Even though African governments are pushing for regional trade integration, challenges and difficulties exist. Limited financial resources, tariff and non-tariff barriers, the slow implementation of a protocol on the mobility of goods and services across countries, and political and economic instability and conflict in some countries have been barriers to regional integration in Africa. Regional integration has been high on African policymakers' agendas and African governments have embraced regional integration as an important component of their development strategies; including in their engagement with their foreign partners, not least so China, the focus of this particular study.
 
 

  • Year 2015
  • Organisation China Institute, Canada
  • Publication Author(s) Daouda Cisse
  • Countries and Regions China, South Africa

Session 5: International lessons

As Africa pursues regional integration due to increasing globalisation, the European Union is an example that Africa could learn from. The EU has been a forerunner in the movement of regional integration since the creation of the European Coal and steel Community in 1952 and the establishment of the European Economic Community in 1957 and this has since invigorated the attempts by other parts of the world to follow suit. Asia also provides valuable lessons on trade that Africa can apply in pursuing regional integration. Asian regional trade has not developed significantly until the financial crisis which forced member countries to trade among themselves in compensation of lessening trade with European and American markets. The existence of a number of regional groupings in Asia unlike in the EU could provide lessons for integration in Africa since Africa has a similar set up. Hence, integrating national policies with regional policies should be valuable to driving greater integration Africa based on regional political and economic institutions.

  • Year 2015
  • Publication Author(s) Nancy Mashodo
  • Countries and Regions Asia, European Union (EU)

Session 4: Market integration and trade

Paper to follow

  • Year 2015
  • Organisation USAID/Southern Africa Trade Hub
  • Publication Author(s) Brian Glancy
  • Countries and Regions South Africa

Session 4: Market integration and trade

Regional Trade Agreements (RTAs) and their outcomes for developmental purposes have puzzled economists and governments, motivating a considerable literature on their supposed benefits and drawbacks. At the same time, the number of RTAs in sub-Saharan Africa has exploded – a proliferation referred to by the IMF and UNECA as “Africa's spaghetti bowl”. On closer inspection, these agreements take on various forms based on a number of variables including the depth of integration, the types of member countries, and the reciprocal or unilateral application of trade liberalisation policies. The growing number, diversity and complexity of RTAs frame the pertinence of broad contextual analysis when it comes to assessing an RTA's growth impacts. As such, this paper takes on a critical engagement of the theory and empirical evidence within this debate for both intra-African and North-South RTAs to apply to a case study of the Economic Community of West African States (ECOWAS). 

  • Year 2015
  • Organisation SOAS
  • Publication Author(s) Benjamin Eveslage
  • Countries and Regions Southern Africa Customs Union (SACU), Southern African Development Community (SADC)

Session 4: Market integration and trade

Industrial development concerns have now become a priority focus in Africa. This is, in some measure, prompted by developments in commodities sectors, where the need for beneficiation of minerals and value addition of the continent's natural resources is enjoying priority focus. There is also recognition that a traditional trade and integration agenda that focuses predominantly on border issues to enhance market access, is not addressing Africa's fundamental challenges of lack of industrial capacity and diversity. In short, the capacity to produce tradeables competitively and the policy mix that will enhance this capacity, are very much occupying the minds of policymakers. The adoption of the Action Plan for Accelerated Industrial Development of Africa (AIDA) by the 10th African Union Assembly of Heads of State and Government in January 2008, is a continental policy response to these challenges. This paper focuses
on the regional aspects of industrial development and specifically, the role of the Southern African Development Community's (SADC) market integation agenda in supporting regional industrial development.

  • Year 2015
  • Organisation Trade Law Centre, tralac
  • Publication Author(s) Trudi Hartzenberg; William Mwanza
  • Countries and Regions Southern African Development Community (SADC)

Session 3: Regional manufacturing and industrial policy 2

This paper explores the literature on the economics of border areas, and introduces the concept of a Border Development Zone. It compiles a compendium of BDZ case studies, presenting 43 examples of border development projects, and attempts to draw lessons from these experiences. It presents various policy options in designing a BDZ initiative, drawn from international experiences. It than examines the Southern African context, looking at patterns of regional integration, existing SEZ structures, and cities on the border with high potential for the development of BDZs. The central conclusion of this paper is that the two Special Economic Zone projects underway in the border towns of Mahikeng and Musina should include targeted policies that attempt to leverage their location at the border. A number of preliminary suggestions on what these policies should be are included in the final section. This paper forms the first of two studies, the second of which will greatly expand on the strategies available to develop border zones in Mahikeng and Musina.

  • Year 2015
  • Publication Author(s) Christopher Wood (SAIIA), Clarence Siziba (WTI),
  • Countries and Regions South Africa

Session 2: Regional integration and SADC

This paper investigates the extent of trade integration of Sub-Saharan African countries in the global economy as well as within the region. Four key concepts are used to assess integration: 1) trade openness, 2) the centrality in the global and regional trade network, 3) gravity model estimates, and 4) global value chain (GVC) integration. We find that the region's trade openness has increased strongly since the mid-1990s, reflecting a growing partnership with emerging markets, particularly China, and budding intraregional trade. However, the region's trade flows have barely kept up with the rapid expansion of global trade. The trade centrality of the economies in the region remains relatively low, and has not increased much over the last 20 years. It remains lower than the one observed in other comparable emerging and developing economies. Likewise, the region still has some way to go to better integrate in global value chains - a feature associated with higher income growth overtime in regions such as South East Asia and Eastern Europe. Some countries are showing progress, albeit from low starting points, with the EAC and SACU particular bright spots. A better insertion into the global economy would help foster structural transformation, export diversification, and the possibility to absorb technology and skills from abroad. 

  • Year 2015
  • Organisation Celine Allard, Wenjie Chen and Emmanouil Kitsios (IMF)
  • Publication Author(s) Celine Allard; Wenjie Chen; Emmanouil Kitsios
  • Countries and Regions Southern African Development Community (SADC)

Session 1: Regional manufacturing and industrial policy 1

This paper identifies important opportunities linked to growing local and regional demand, and what constraints exist for their exploitation. It identifies several areas of untapped, substantial opportunities for Zambia's manufacturing sector. While Zambia's competitiveness in global markets is challenged by macroeconomic factors (fluctuating exchange rates, real exchange rate appreciation) and structural bottlenecks (transportation costs, infrastructural services), all of which will require ambitious policy interventions and long-term investment (roads and railways rehabilitation and construction, electricity, internet connectivity), there are more immediate opportunities that are available in addition to its focus on copper beneficiation. These opportunities include strengthening linkages to urban demand for processed food, increasingly structured around supermarket retail chains, and to copper mining demand for goods and services. Opportunities also exist for suppliers to the mining industry as copper mining companies require a local supply chain capable of providing value added services and products, at reasonable prices and within short lead times.

  • Year 2015
  • Organisation Centre for Competition, Regulation and Economic Development (CCRED) University of Johannesburg
  • Publication Author(s) Judith Fessehale; Reena das Nair; Phumzile Ncube
  • Countries and Regions Zambia

Session 6: A regional approach to energy resources

 

  • Year 2015
  • Organisation UNU-Wider
  • Publication Author(s) Amy Rose

Session 8: Agricultural value chains in the region

This paper expands a case study by Emet Consulting for the South African Institute of International Affairs (SAIIA) in 2014. The case study (Regulatory Constraints to the Development of a Fuel Ethanol Market in SADC) was a component of a project funded by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), through its ProSPECT project, investigating the most significant constraints to doing business in the SADC region. Through the project GIZ and SAIIA aimed to provide concrete examples of constraints to doing business in the region, as well as potential solutions. The overall objective of the research was to reduce these business constraints by facilitating a dialogue in the SADC region on their removal, thereby allowing the private sector to take advantage of the opportunities offered by regional integration.

  • Year 2015
  • Organisation Emet Consulting / ACCORD Development Consulting
  • Publication Author(s) Wolfe Braude
  • Countries and Regions South Africa, Southern African Development Community (SADC)

Session 7: Minerals value chains: Upstream and beneficiation

This paper presents key trends in the global value chain for mining capital equipment. It includes a section on the background of the South African and Zambian mining inputs clusters. It maps the regional value chain for mining capital equipment and presents the research findings in terms of firm entry, upgrading processes and regional inter-firm linkages, and looks at policy constraints at national and regional level.

 

  • Year 2015
  • Organisation CCRED, University of Johannesburg
  • Publication Author(s) Judith Fessehale
  • Countries and Regions South Africa, Zambia

Session 7: Minerals value chains: Upstream and beneficiation

Copper, as Zambia's economic mainstay, is a mineral whose value chain stretches beyond the country's Copperbelt Province and the recently acclaimed “New Copperbelt” Northwestern Province. The Copperbelt Province as the mining hub has several industries benefiting from both upward and downward linkages in the Sub-Saharan African market and other regions globally. Despite the challenges associated with mining and mining economies being real, Zambia needs to learn from countries within the Southern African region such as South Africa and those in other continents such as Chile in order to have a formidable escape strategy from the “natural resource-curse phenomenon”. With such a strategy, stronger industrial linkages at home as well as improved contribution to regional industrialization are possible. Ultimately, this can strengthen economic growth and usher the country into a stage where beneficiation from the mines go beyond the local value chain debate but the entire nation as people see the tangible fruits of economic growth positively impacting human development indicators. The reality in the economic indicators would then truly reflect the reality on the ground among ordinary Zambians as is the case in Chile. 

  • Year 2015
  • Organisation University of Zambia
  • Publication Author(s) Godfrey Hampwaya; Wisdom Kaleng'a; Gilbert Siame
  • Countries and Regions South Africa, Zambia
Session 6: A regional approach to energy resources
 
This study develops a reliability assessment method of wind resource using optimum reservoir target power operations that maximises the firm generation of integrated wind and hydropower. This model is applied on the reservoir storages and hydropower system in the Zambezi river basin to demonstrate how storage reservoirs could be used to offset wind power intermittence in South Africa subjected to different physical and policy constraints. The result obtained indicates that high regulation of wind and hydro can be achieved as a result of combined operation and showed an increased level of wind penetration in South Africa's power system over the reference scenario. The result also indicated a reduced level of coal power utilization and less cycling requirement. This will have a positive outcome in terms contributing to South Africa's goal towards reducing greenhouse gas emission and the efforts to build green energy supply and resilience to the impacts of climate change

  • Year 2015
  • Publication Author(s) Yohannes Gebretsadik; Charles Fant; Kenneth Strzepek
  • Countries and Regions South Africa, Zambia, Zimbabwe

Session 10: Agricultural value chains in the region

This paper examines the reasons for the growth in the poultry industry in Malawi in the past 10 years. 

  • Year 2015
  • Organisation Malawi's Deputy Director of Industry
  • Publication Author(s) Clement Phangaphanga
  • Countries and Regions Malawi

Session 9: A regional collabroation: Different approaches

There is long-standing, wide consensus on the need for greater economic connectedness in Africa. Despite the rhetoric and apparent policy consensus, implementation of related commitments lags seriously. The lack of progress towards the free movement between national markets of goods, services, people and capital is frequently blamed on a combination of lack of political will and lack of capacity. Yet, it is necessary to better understand what these twin deficiencies actually entail. This paper takes a politicaleconomy approach to regional integration to try and understand progress on regional economic integration.

  • Year 2015
  • Organisation European Centre for Development Policy Management
  • Publication Author(s) Bruce Byiers; Jan Vanheukelom
  • Countries and Regions Mozambique

Session 9: A regional collabroation: Different approaches

This paper reports on the results of an investigation into the contribution of cooperative management of water resources to regional integration in SADC. The study found that, while a few bilateral projects had contributed to economic development, there was little evidence of a systemic contribution to formal integration. An evaluation of the opportunities and constraints suggests that more effective intersectoral coordination at national level to make better use of resources to stimulate industrial development is the first priority. A more general conclusion is that a functional approach to integration that seeks and supports practical opportunities for mutually beneficial cooperation is more likely to succeed than a focus on generic regional institution building. 

  • Year 2015
  • Organisation Visiting Adjunct Professor, Wits School of Governance
  • Publication Author(s) Mike Muller
  • Countries and Regions Southern African Development Community (SADC)

Technical regulations lay down compulsory requirements for product or service characteristics or their related processes and production methods. They have specific administrative provisions and conformity assessment requirements with which compliance is mandatory for safety, health, environmental control and consumer protection. The capacity to comply with international standards, norms and technical regulations underpins the potential for economic and industrial growth. Standards and conformity assessments are required to prevent the influx of substandard and injurious products into African markets and to improve the quality, and enhance potential access, of African products to export markets.

This policy brief examines the implications for regional integration that the strengthening of technical infrastructure capacity in African countries for metrology, standards, accreditation and conformity assessment and compliance could have for Africa's industrialisation efforts.

  • Year 2015
  • Publication Author(s) Mbofholowo Tsedu
Published in Policy Briefs

This paper forms part of a broader research project TIPS has been involved in around common regional industrial policies. It looks at three examples of regional integration: the Association of Southeast Asian Nations (ASEAN), the European Union and Mercosur. The focus is on understanding the drivers and motivation for regional integration in different parts of the world. It looks into how integration was supported and directed, and specifically how these blocs deal with issues of common industrial policies. It aims to assist in understanding the supply and demand for deepening regional integration and how integration options and approaches can be designed to respond to highly specific contextual circumstances.

  • Year 2012
  • Organisation TIPS
  • Publication Author(s) Sandy Lowitt
Published in Trade and Industry

Southern African Development Community (SADC) members signed the Trade Protocol in 1996, however progress in the region to reap the benefits purported to accompany regional economic integration appears limited. Although SADC has adopted a growth and development through trade strategy, indications are that more needs to be done to implement this in a way that yields more positive results.

  • Project SADRN
  • Year 2011
Published in Policy Briefs
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