This paper uses the Global Trade Analysis Project (GTAP) computer database and takes the full suite of African agricultural sectors and African countries/regions in order to assess the benefits of intra-African tariff liberalisation in agricultural merchandise across the continent.

We start by examining recent intra-African agricultural trade flows by partners and commodities. We find that South Africa is the main trader and tobacco and sugar are the main commodities traded. However, it must be noted that this data is different from the 2011 data used by the GTAP and we caution about data accuracy in Africa in particular. Before undertaking our simulations we incorporate the EU sugar reforms into the data and assess the benefits of liberalisation as they are measured at the end year of 2025.

As is usually the case, South Africa is the leading beneficiary, with the economy at 2015 being some $1,840 million better off than it would otherwise have been. Kenya is the next largest African gainer, followed by Senegal and Côte d’Ivoire. Zimbabwe is the big loser, and outside of Africa all countries/regions show a loss. For South Africa, the largest contribution ($753 million) is from changes in the capital investment situation as investment is attracted into the country, and this is followed by improved terms of trade (as measured by the model).

The key agricultural sectors are vegetables, fruits and nuts; crops (other); meat of cattle, sheep, goats and horses; vegetable oils and fats; dairy products; refined sugar and associated products; food products not classified elsewhere; and beverages and tobacco. By country, the key ones were South Africa, Kenya, Tanzania, Uganda, Zimbabwe and Cote d’Ivoire. Overall, the largest impact is felt in the vegetable oils and fats sector, with Côte d’Ivoire and Kenya the African gainers.

The more interesting outcome, however, is in the sugar sector, where South African gains through better access into Kenya, which in turn makes significant gains as it reduced its sugar production significantly and transferred resources out of a sector which had been heavily protected but technically inefficient. This is a classic example of how regional integration can benefit a country through efficiency gains. Changes in other sectors are often dominated by South Africa.

We find that Kenya, Tanzania, Zimbabwe and the rest of Africa lose significant tariff revenues that in the real world has to be adjusted for in some way, and that Senegal, Kenya and Côte d’Ivoire all report an enhancement in labour market remuneration of around 0.2% or more. Overall, Zimbabwe is the big loser in Africa from this liberalisation, and only Tanzania has a similarly meaningful loss.

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In recent times tralac has published extensively on African trade, with an emphasis on southern and eastern Africa as the Tripartite FTA developed. There has not been a commensurate emphasis on the analysis of trade in the western half of the continent, and the objective for this paper is to remedy that situation and in particular examine the intra-western African trade and the intra East-West African trade.*

There are 23 countries in our definition of west and central Africa (WCA), most of which are members of either or both of the Economic Community of West African States (ECOWAS), the Economic Community of Central African States (ECCAS) and the Community of Sahel-Saharan (CEN SAD).

The European Union (EU) has consistently been the main destination for WCA exports, albeit with fluctuations in the export share. Both the BRICs and Africa as a whole (including intra-WCA trade) have been increasing, while the US share has declined dramatically. During 2014 exports from WCA to Africa accounted for some 17.5% of total WCA exports, while the comparable share for WCA imports from Africa was a lower 12.6%. Within this data for WCA trade with Africa we found that the share of Intra-WCA imports in WCA imports from Africa was 75.82% in 2014. West Africa therefore imported more from within its own region than from other outside regions in Africa.

Examining the profile for WCA exports to the world we found that the share of intra-west African export in West African exports to Africa is 72.7% in 2014. This means that again WCA exported more to African countries from within its regions than to other African countries outside WCA. The importance of these intra-WCA exports are variable but have been in the range of 11% to 15% of total exports in recent years. The leading export is, as expected, mineral fuels with a 69.2% of the total intra-West Africa export, followed by ships and related structures. These mineral fuels are exported mainly by Gabon and Nigeria.

A reconciliation exercise gives a somewhat confusing pattern. For 2013 and 2014 overall imports are only 62% and 60% of the comparable import data. Much of this difference can be found in the mineral fuels data, although the category of ships and related vessels leaves much of the data unexplained.

* This paper was prepared during a tralac ‘Geek Week’ data training workshop during the week of October 5 to 9, 2015.

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This paper examines the Free Trade Agreement (FTA) between Australia and China (ChAFTA) that was signed on 17 July 2015. The examination provides an emphasis on the implications for South Africa. It concentrates on an analysis of Australia’s merchandise exports to China, with these exports set in a perspective that enables us to assess access concessions against South Africa’s (and to a lesser extent New Zealand’s) exports. South African imports from China face significantly different access issues than do the comparable Australian imports. Accordingly, we feel that there is little to be gained by dwelling on the tariff concessions that Australia has made to China.

During 2014 China imported goods worth some $44.6 billion from South Africa, a figure just under half of the Australian imports of $98 billion. We warn, however, that the data for these imports from South African does not match the reported exports from South Africa to China. It is made even more complex by the Chinese use of a ‘Special’ import line that is undisclosed and comprises imports from South Africa to about one half of its significant value. Much of this trade may be gold, and as South Africa does not disclose its gold export destinations it is difficult to assess the real values of this trade.

There have been some changes to the investment regimes in both countries, but these seem to be relatively minor. The exceptions are that concessions have been granted with respect to movement of people to support investments and some liberalisation of the services sectors. The usual endeavours to cooperate more comprehensively on the general non-tariff measures (NTMs) are incorporated into the agreement. This is so as the rules of origin (RoO) procedures seem to be standard and the parties have agreed that neither member will introduce or maintain export subsidies on goods destined for the territory of the other.

In the final analysis there are few implications for South Africa from ChAFTA. Australia gains some advantages in the Chinese resources market, but while these are important they are not massive. In general, the tariffs are low and there is limited South Africa-Australia head-to-head competition in most lines. Australia gains some advantages in agriculture, but these are mainly in commodities where South Africa does not compete – except for perhaps wine. There are no changes to the important sugar market, and in other merchandise trade sectors there are few advantages to Australia over South African competitors in China. Crucially, on Chinese imports Australia has negotiated its already low tariffs on clothing to go to zero very quickly. This is something that South Africa could not contemplate under the existing trade regime. Elsewhere in the trade remedies, services, and investment chapters, there appears to be few pointers for South Africa to muse over.

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The objective of this paper is to analyse the Southern African Customs Union’s (SACU) agricultural trading relationship with particular focus on South Africa’s dominant trading position vis-à-vis the rest of SACU member states, namely Botswana, Lesotho, Namibia and Swaziland (BLNS). Aggregate trade data for the first section of the paper was sourced from the International Trade Centre (ITC), while for the second section of the paper, the trade data that was used was sourced both from the ITC and from the SACU Secretariat. All data is expressed in rand (millions) and relative market shares.

South Africa’s aggregate exports to the SACU region steadily increased from R80.6 billion in 2010 to R131.3 billion in 2014 and recording a 62.9% growth over the period. Its aggregate imports from SACU similarly increased from R18.3 billion in 2010 to R29.6 billion in 2014, recording a 61.5% growth over the period. The agricultural products in the top 25 listing of exports to SACU were maize, sugar, wheat, cigarettes and juices, with maize, sugar and wheat accounting for 6.5%, 5.3% and 4.4% respectively in 2014.

South Africa’s top three imports from SACU were odoriferous mixtures, diamonds and chemical industry products, totalling R3.5 billion, R2.4 billion and R2.0 billion respectively in 2014. Within the top 25 there were the agricultural products of sugar, beer, beef, sugar confectionery, live cattle, and sheep and goat meat. Total agricultural imports from SACU increased from R5.1 billion in 2010 to R6.5 billion in 2014, representing a 28% growth over the period. Sugar ranked the highest followed by beer and beef.

Intra-BLNS agricultural trade is extremely limited. Namibia exports some beer to both Botswana and Lesotho and imports some beef from Botswana. Lesotho has virtually zero exports to the other BLNS partners but imports cotton from Botswana. Botswana imports various products in minor amounts from Namibia, while Swaziland is not actively involved with the BLNS partners. 

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This paper analyses trade between the three Regional Economic Communities (RECs) of the Common Market for Eastern and Southern Africa (COMESA), the African Economic Community (EAC), and the Southern African Development Community (SADC) using trade data from the International Trade Centre (ITC). The data is generally ranked by 2013 as that is the most consistently and seemingly comprehensive reporting available.

Examining each REC in turn we find that both Rwanda and Uganda export around half of their totals to COMESA, with DRC and Burundi around 20%, Zambia and Malawi around 15% and the rest below this figure. Libya with less than 0.5% is the outlier. Within the EAC, Kenya is the largest intra-EAC exporter with a share that varies around one-half while Uganda, Rwanda and Tanzania have similar shares of around 15% to 20%. Rwanda reports that some 72% of its exports were destined for EAC during 2013, but the data for other years varies significantly. As expected, South Africa dominates the intra-SADC exports with a share around 50% to 60%.

Next is a group of eight members with shares that are all generally grouped between 3% and 8%. By shares of exports destined for SADC, Zimbabwe reports that over 90% of its exports are in this category, and both Swaziland and Namibia report around 50% to 60%. Angola, like fellow oil exporter Libya in COMESA, has a very low share of around 3% only destined for SADC.

Overlapping memberships are a major feature of the RECs, and we must be careful to assess the overall impact of these to avoid double-counting intra-REC trade. We have taken two subcategories of each REC: (a) ‘pure’ trade entails intra-REC trade that excludes trade counted as intra-regional trade in another REC as both partners are members in common of another REC, whereas (b) ‘geographical’ trade entails all REC members which are arbitrarily assigned to their logical geographical regions. Pure trade is a subset of the full data while geographical trade in turn is a subset of pure trade.

There are, of course, several issues related to these definitions that suggest that we are taking an almost naive approach but this approach does highlight the overlapping issue. We have only assessed exports under these definitions, and ‘pure’ entails only intra-REC trade.

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Collating and analysing African trade data is an exercise fraught with difficulties. In many instances this data is not available from its primary source, and this leads to the use of so-called mirror data or data assessed by examining the mirror of the trade partner data. While this is a very good proxy, it does lend itself to some interpretational problems (such as when neither partner reports).

In addition, there are many other issues that one encounters such as transhipment of goods across boundaries, data classification differences, whether or not the costs of transport and associated costs are included in the import values, and the sensitivities associated with some goods that lead to a country not reporting the full picture (South African gold trade, for example). These difficulties persist despite organisations, such as the International Trade Centre (ITC), making great strides in improving data availability and accuracy.

This is an important issue as politicians and trade officials and practitioners rely upon accurate data for sound policy-making outcomes. The problem is that in examining trade data we find numerous examples of where data seems to disappear into a ‘black hole’. Often, as in seemingly unnatural phenomena, a logical explanation can be found but, conversely, at other times no apparently logical explanation offers itself.

The objective of this paper is to peruse African trade data and explore some of its mysteries. We appreciate that a case cannot be proved or disproved by offering examples, but we consider that the examples provided at least help to explain some of the seemingly contradictory findings from trade data. The emphasis is on intra-African trade data.

Overall, African trade data now reconciles relatively well at the big-picture level of aggregate country reporting when either direct or mirror data is used. Nevertheless, some glaring gaps remain. This applies especially to the commodity analysis, and further investigation shows that these two aspects of intra-country and commodity problems are often interrelated. However, the situation is improving, and examples of this include the reporting by South Africa of its intra-Southern African Customs Union (SACU) trade data since 2010.

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This paper provides an update on South Africa’s foreign investment position through to and including the December 2012 year with respect to the old, new and good friends of the EU and USA; the BRICs of Brazil, Russia, India and China; and Africa, respectively. The three categories of investment recorded by the South African Reserve Bank are: foreign direct investment (FDI), portfolio investment, and ‘other’ investment. Each will be examined in turn.

The data is stock data and it has been sourced directly from the South African Reserve Bank. It is the results of their survey data to assess the values of foreign assets in South Africa (liabilities resulting from inflows of foreign capital) and South African assets abroad (assets resulting from outflows of South African capital). The data is denominated in South African rands (either billion or million) and we show percentage shares to give a better perspective on the relative importance of sources and destinations in both absolute terms and relative changes.

South Africa’s total foreign liabilities are dominated by ‘old’ friends (EU and US). The ‘new’ friends are only starting to register at around the 2% level, while the ‘good’ friends of Africa have been relatively consistent at around the 5% level. Recent highlights are the big entry for new friends (China) in 2008 and some big changes from good friends in 2003 and 2004. There have also been fluctuations in the contributions from the ‘others’ or those not included as friends for this exercise. The two years of 2002 and 2008 stand out with large disinvestments from the old friends.

South Africa’s investments abroad (assets) again show that the old friends dominate as a destination. Good friends have been stable and increasing over the period while the new friends have featured from around 2006 onwards. Changes in investments for South Africa have been relatively stable, and only during 2002 was there a decline, with this decline reported for the old destinations. 

While this paper examines the ‘big picture’ only it does raise some interesting questions as to what is driving some of these recent developments. Especially important for the South African economy is the investment relationship with China, as this is the overwhelming development in the last few years. Similarly, but in a less dramatic manner, the steadily increasing South African investments in the African continent suggest than a more detailed analysis of these investments is likely to reveal some interesting stories at the firm level.

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This paper clearly reinforces the data warning outlining the dangers inherent in trying to analyse intra-African trade data. The use of mirror data, late and non-reporting and ‘vanishing’ trade has been the bane of this research; we must therefore emphasise that this paper is far from being a definitive analysis of intra-African trade. We must also emphasise, however, that the ITC is the best available source of consistent trade data and this paper represents a systematic attempt to use the available data to start shedding light on intra-African trade.

Over the last few years the aggregate intra-African trade’s (imports and exports) share of total African trade has consistently been around the 12% mark (with a high of 14% in 2009) as shares from both the European Union (EU) and the United States (US) are dramatically declining in the face of increasing Brazil, Russia, India and China (BRIC) trade.

Using the ITC direct and mirror data for imports we found that the main intra-African exporters are South Africa, Zambia, Botswana and Namibia. At the HS 2 Chapter level imports are headed by mineral fuels, ships and related equipment, general machinery, vehicles and electrical machinery, but according to the mirror data we have brought trading in precious stones and metals into the top bracket for later analysis.

By combining direct and mirror data the main intra-African exporters are South Africa, Nigeria, Côte d’Ivoire and Egypt, By HS products the main exports are fuels, ships, precious stones and metals, general machinery, vehicles, and electrical equipment.

Reconciliation of intra-African data clearly exposes the significant problems inherent in such an exercise and leaves us still seeking the truth in numerous places. There are several main data problems: (a) non-reporting where the mirror data is often used in place of direct data and, of course when neither party reports its data the mirror is non-existent; (b) the penchant for South Africa not to report gold trading and, at least until recently, poor intra-Southern African Customs Union (SACU) reporting; and (c) the suspected confusion of re-exports in at least vessels and related equipment and vehicles.

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Much of the focus of South Africa’s trading relationship with BLNS countries is on the SACU revenue-sharing formula, a formula which is based entirely upon one side and one side only of this relationship. The SACU tariff revenue pool is divided on the basis of intra-SACU imports. These imports are dominated by BLNS imports from South Africa.

The objective of this paper is to analyse the Southern African Customs Union (SACU) trading relationship and briefly discuss the tariff revenue-sharing formula before going further and examining the implications of interrelated themes in terms of regional development. Analysis has generally focused much more on South Africa’s exports to Botswana, Lesotho, Namibia and Swaziland (BLNS) for two reasons: (a) this is the dominant trading relationship and (b) the SACU tariff revenue sharing is based upon intra-SACU imports only.

We have used South African trade data sourced from the International Trade Centre (ITC) expressed in US dollars in the first section of the paper but BLNS trade data sourced from the SACU Secretariat denominated in rand in the second section.

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Regional integration remains a prominent policy objective for Africa. Its emphasis at continental level was confirmed by the decision of the members of the African Union to establish a Continental Free Trade Area (CFTA) in accordance to the Abuja Treaty. While this is an appealing idea, it is fraught with challenges. Chief of these is the fact that among the existing regional integration communities in Africa, very few have met their commitments by implementing their treaties and protocols. Furthermore, not all countries are signatories to regional trade protocols and even after signing the protocols, trade tariffs and non-tariff barriers still continue to impede intraregional trade.

While challenges exist, what is critical to note is the fact that liberalisation is continuing in Africa, albeit at different rates among different RECs. The objective of this study is to assess the state of liberalisation among African countries both at the multilateral level and at the regional level with the aim of highlighting the challenges that the attainment of a CFTA will face in achieving its goal.

The paper is organised as follows: We begin by looking at the methodology and data concerns in analysing tariff data. This is followed by a section presenting the status of tariff regimes and then we focus on issues related to the achievement of the CFTA itself. Conclusions are then presented. As 53 countries are analysed and in some instances data is not available, we have split the analysis and focused more on the main RECs recognised by the AU for the purposes of this paper. In our view, focusing on these will give clear indications where the gaps exist that require countries to make concessions if a CFTA is to be achieved.

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Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.