Africa-Asia trade triples in 5 yrs

CHINESE and Indian firms are increasingly doing business in sub-Saharan Africa and their interest in the continent extends well beyond a hunt for natural resources, a new World Bank study says.

Exports from Africa to Asia tripled in the last five years, making Asia Africa’s third largest trading partner (27 per cent) after the European Union (32 per cent) and the United States (29 per cent), according to the study entitled, ‘Africa’s Silk Road: China and India’s New Economic Frontier’. At the same time, more and more Chinese and Indian firms are seeking to manufacture and export sophisticated components, such as those produced by the South African car-parts industry, to the global market.But the study indicated that the conventional remedy of reduced trade barriers will not be enough.More important are ‘behind-the-border’ reforms to encourage competition, strengthen market institutions and improve governance in African nations, and ‘between-the-border’ reforms in both regions, to reduce international transactions costs.”Part of what the Africans need to do to attract China is reduce the cost of doing business,’ said the Chief Economist of the Bank’s Africa region,” John Page.The study offers original data on Africa and of Chinese and Indian firms operating on the continent, said the study’s author, Bank Economic Adviser, Harry Broadman.Broadman surveyed 450 Chinese and Indian companies operating in four African countries – South Africa, Tanzania, Ghana and Senegal – and developed first-time business case studies of 16 other Chinese and Indian firms in Africa.The study said many African countries could greatly benefit from untapped south-south trade opportunities, such as tourism aimed at China, Eastern Europe, Latin America and the former Soviet Union.”The tourism industry in Africa is underdeveloped.It’s just a huge market waiting to happen.But what is needed is something Africa lacks: infrastructure – roads, airports, transit systems, and telecommunications,” Broadman added.According to the study, this area is a deficiency keenly felt by Africa’s trading partners.China, for one, is looking for opportunities to contribute to the World Bank’s work in Africa including infrastructure projects.NampaAt the same time, more and more Chinese and Indian firms are seeking to manufacture and export sophisticated components, such as those produced by the South African car-parts industry, to the global market.But the study indicated that the conventional remedy of reduced trade barriers will not be enough.More important are ‘behind-the-border’ reforms to encourage competition, strengthen market institutions and improve governance in African nations, and ‘between-the-border’ reforms in both regions, to reduce international transactions costs.”Part of what the Africans need to do to attract China is reduce the cost of doing business,’ said the Chief Economist of the Bank’s Africa region,” John Page.The study offers original data on Africa and of Chinese and Indian firms operating on the continent, said the study’s author, Bank Economic Adviser, Harry Broadman.Broadman surveyed 450 Chinese and Indian companies operating in four African countries – South Africa, Tanzania, Ghana and Senegal – and developed first-time business case studies of 16 other Chinese and Indian firms in Africa.The study said many African countries could greatly benefit from untapped south-south trade opportunities, such as tourism aimed at China, Eastern Europe, Latin America and the former Soviet Union.”The tourism industry in Africa is underdeveloped.It’s just a huge market waiting to happen.But what is needed is something Africa lacks: infrastructure – roads, airports, transit systems, and telecommunications,” Broadman added.According to the study, this area is a deficiency keenly felt by Africa’s trading partners.China, for one, is looking for opportunities to contribute to the World Bank’s work in Africa including infrastructure projects.Nampa