Last month could potentially have marked a turning point for the cement industry in Nigeria when the 6 million tpa Ibese plant, owned by Dangote Cement, was inaugurated. It is reported that Dangote’s capacity now exceeds 20 million tpa, forming a substantial portion of the country’s 28 million t of installed capacity. In a bid to maintain its market share, Lafarge Cement WAPCO Nigeria plc is also reported to be planning to increase capacity, and with other companies seeing the potential in the country, Nigeria could soon become a key exporter of cement in the region.
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For a continent in need of further infrastructure development, this can only be good news, but what about the obstacles to importing and exporting goods and services between African countries? The World Bank has recently released a report entitled ‘De-Fragmenting Africa: Deepening Regional Trade Integration in Goods and Services’, which examines the challenges posed to businesses and individuals attempting to trade across borders within Africa. I say ‘report’, it’s really more of a book, but if you’re interested in the short version there’s a video called ‘Let Africa Trade With Africa’ on the World Bank website, which I would thoroughly recommend. It tells how ‘non-tariff’ barriers are preventing African countries from sharing resources, whether that resource is food or cement or even professions such as accountants or teachers.
The story goes that just 10% of Africa’s trade is within Africa. African nations have done a better job setting up (and, crucially, abiding by) trade agreements with foreign countries than they have with themselves. One country can be experiencing a food shortage while another has surplus in storage, and for the most part it is bureaucracy getting in the way. The video I mentioned describes how Africa’s leading supermarket chain must spend an average of US$20 000 per week on import permits for just one country, and how the same company requires something like 1600 documents per truck to cross a regional border. Can you imagine preparing that many documents per truck? Is it any wonder that businesses choose to market their goods elsewhere and save themselves both time and money?
But choosing to trade elsewhere does Africa a disservice; particularly at a time when global markets are down. If these ‘non-tariff barriers’ could be simplified and corruption eradicated (perhaps a little too optimistic!), there are great opportunities for all levels of investment, from the women crossing borders to sell eggs, to the multinational cement companies with surplus supply in a continent with great need for infrastructure investment, poor infrastructure being another obstacle to inter-African trade. Ultimately, each country must address its own trade issues, but it is no good doing this in a vacuum. Cooperation at all levels is essential to enabling national and African growth, and African growth could mean a much-needed boost for the international economy.