More US/Africa Trade, More Opportunity

The Office of the US Trade Representative reports that US-Africa trade volume is rising and has been for the past 8 years. The AllAfrica website carries the story here. One of the interesting observations in the story is the product mix involved in this trade. The story reports:

"The trade growth is being driven by several key economic sectors, including machinery, automotive vehicles and parts, wheat, non-crude oil products, aircraft, and electrical machinery, which includes telecommunications equipment."

Although the trend is positive, the level of US/Africa trade is still low. Why? A part of the answer is trade barriers within Africa. The story quotes Deputy US Trade Rep Demetrios Marantis:

"Average African tariffs are nearly 20 percent. This is compared to just over 10 percent for the rest of the world, and 5 percent for industrialized countries," Marantis said. [In addition]Many African countries lack manufacturing capacity and face challenges such as high energy and transportation costs. This makes products less competitive in global markets."

Building manufacturing capacity can happen when countries improve the environment for investment. Hopefully, the lure of a larger chunk of the world's trade will continue to spur a number of sub-Saharan countries, Rwanda included, to make these important changes.

- Karol