Africa s external and intra-regional trade

Transcription

1 Africa s external and intra-regional trade Dr Edward George Head of Soft Commodities Research, Ecobank Euromoney Global Commodities Finance Conference, Geneva, 5 June 2013

2 Section 1 Africa s external trade

3 Exports Algeria Libya Egypt Cote d Ivoire Ghana Nigeria Cameroon Kenya Total imports in US$ (not to scale), 2011 Sources: Intracen, Ecobank Research. Zambia Crude & petroleum products Metals, ores & precious stones Timber & wood products Cocoa, coffee & tea Cotton Angola South Africa 3

4 Imports Libya Algeria Egypt Cote d Ivoire Ghana Nigeria Cameroon Kenya Total imports in US$ (not to scale), 2011 Sources: Intracen, Ecobank Research. Crude & petroleum products Machinery, vehicles & electronics Iron & steel Cereals & flour Sugar Angola Zambia South Africa 4

5 Commodity exporters dominate trade volumes The oil & gas exporters run large trade surpluses Total trade, US$ million, 2011 Country Exports Imports Total trade Trade balance Algeria 73,562 46, ,988 27,136 Angola 59,349 15,181 74,530 44,168 Cameroon 4,387 4,187 8, CDI 11,049 6,720 17,769 4,329 Egypt 30,782 59,269 90,051 (28,487) Ghana 7,988 12,341 20,330 (4,353 ) Kenya 5,853 15,028 20,881 (9,174 ) Libya 18,266 6,084 24,350 12,182 Nigeria 95,199 43, ,588 51,811 South Africa 92,976 99, ,702 (6,750 ) Zambia 8,954 7,149 16,102 1,805 Source: Intracen. South Africa has by far the largest trade volumes, followed by Nigeria & Algeria Oil exporting countries run healthy trade surpluses, with the exception of Cameroon Egypt has the largest trade deficit, followed by Kenya, South Africa & Ghana 5

6 EU, China and USA dominate bilateral trade Africa s key trade partners, 2011 Exports to Africa (US$ m) Imports from Africa (US$ m) Bilateral trade (US$ m) % of total Country EU 186, , , % China 85, , , % Other Africa 70,191 63, , % USA 32,845 68, , % India 23,346 39,780 63, % Brazil 12,210 14,266 26, % Others 125,231 89, , % World 535, ,984 1,129, % Sources Intracen. Africa s trade with the world, % 6% 9% 19% 12% 17% 35% EU China Other Africa USA India Brazil Others Intra-regional trade totalled US$133bn in 2011, just 11.8% of Africa s trade with world Although it has grown from 4% in 1960, it is still below the peak of 15% in 1997 Key trade partners are the EU (35%), China (18%) and the USA (9%) Africa s share of world trade is just 3.1%, a proportion that has been stable for years 6

7 Section 2 Africa s intra-regional trade a sleeping giant?

8 Africa s intra-regional trade is poorly developed Intra-regional and extra-regional trade US$ billion & %, Source: World Bank.

9 Intra-African exports Maghreb West Africa EAC Intra-African exports, US$, 2011 Sources: Intracen, Ecobank Research. Crude & petroleum products Machinery, vehicles & electronics Metals, ores & precious stones Food products Cash crops SADC 9

10 Intra-African imports Maghreb West Africa EAC Intra-African imports, US$, 2011 Sources: Intracen, Ecobank Research. Crude & petroleum products Machinery, vehicles & electronics Food products Iron & steel Cement SADC 10

11 SADC dominates intra-african trade West Africa is more focused on crude oil exports Share of Africa s trade with world, 2011 Share of Africa s intra-regional trade, % Maghreb West Africa 18% 46% Central Africa 44% 32% EAC 24% 4% 5% SADC 7% 7% Sources: Intracen, AfDB, Ecobank Research. SADC dominates external and intra-regional trade flows Nigeria s share of intra-regional trade is smaller than its external trade, reflecting the dominance of hydrocarbons in the country s exports 11

12 Largest economies have largest trade volumes But data is heavily skewed by exports of commodities Top ten trade with world, 2011 Top ten intra-african trade, % 17% South Africa Nigeria Algeria Egypt Angola 41% 15% 8% South Africa Nigeria Côte d Ivoire Namibia Zambia 2% 2% 3% 4% 5% 7% 8% 14% 11% Morocco Tunisia Ghana Libya Congo-B Others 4% 4% 4% 4% 6% 6% 4% 4% Egypt Botswana Ghana Libya Tunisia Others Sources: Intracen, AfDB, Ecobank Research. Mineral giant South Africa and oil producers dominate total trade volumes But South Africa & Nigeria s share of intra-african trade is smaller Côte d Ivoire, Zambia & Ghana stand out as regional trade hubs 12

13 But few have well developed intra-regional trade links Commodity exporters contribute little to intra-regional trade Top 20 African traders, US$ billion, Sources: Afreximbank, Ecobank Research. 13

14 Landlocked countries drive intra-regional trade Top 20 African countries intra-regional trade, US$ billion, 2011 Country Total intra-african trade % of country s total trade % of region s total trade Mali % 0.5% Zimbabwe % 0.7% Namibia % 1.2% Rwanda % 1.7% Côte d Ivoire % 1.9% Botswana % 0.9% Zambia % 1.0% Togo % 0.2% CAR % 0.2% Malawi % 0.2% DRC % 6.5% Senegal % 0.6% Niger % 0.2% Uganda % 3.5% Burkina Faso % 0.3% Guinea-Bissau % 0.0% Mozambique % 0.4% Kenya % 8.1% Libya % 3.0% Cameroon % 3.0% Burundi % 0.4% Ghana % 1.3% Landlocked countries make up 11 of the Top 15 intra-regional traders Notable standouts include: Namibia integrated into Rand Zone Côte d Ivoire over 40% of its trade is with West Africa Togo major entrepot for goods Senegal & Cameroon entry point to interior (Sahel & Central Africa) Mozambique & Kenya: food flows But volumes are relatively small; most are <2% of regional trade Kenya s intra-regional trade is largest, at 8.1% of EAC trade flows DRC (6.5%) and Cameroon (3%) are significant in Central Africa Sources: Afreximbank, Ecobank Research. 14

15 Informal trade is flourishing

16 Leading trade houses have large footprint in Africa Competition varies between the different commodities Commodities traded by key trade houses in Africa, 2010 Source: Olam. 16

17 There are many players in the cocoa trade % of total cocoa purchases by volume Cote d Ivoire, 2010/11 Ghana, 2011/12 23% 4% 5% 5% 6% 6% 7% 18% 12% 14% Cargill ADM Barry Callebaut Olam Touton Négoce Ali Lakiss Noble Esteve Armajaro Others 5% 5% 5% 7% 7% 15% 8% 13% 35% PBC Akuafo Adamfo Armajaro Ghana Transroyal Ghana Olam Ghana Federated Commodities Cocoa Merchants Ghana Kuapa Kokoo Others Cargill & ADM of the USA are dominant in Cote d Ivoire s privatised cocoa market Ghana s cocoa market, regulated by Cocobod, is dominated by local players (notably PBC) There are many subsidiaries of the majors purchasing beans on their behalf Largest confectioner that buys directly is Barry Callebaut Sources: CCC, Cocobod, Ecobank Research. 17

18 Petroleum products is a tight market A handful of oil majors & traders dominate the sector Market share of petroleum product retailers in Africa, 2011 Leading oil trading houses, % 7% 14% 10% 17% 22% 18% Total Shell Engen Chevron OilLibya BP Others Company Revenue (US$ billion) HQ Geneva & Rotterdam Glencore Trafigura Geneva 79.2 Vitol Baar (CH) Addax & Oryx Group Geneva 2.5 Just six companies handle 90% of SSA s petroleum product retail sector Total & Shell have a 40% market share, while Engen & OilLibya are major African players Other local retailers include Oando, KenolKobil & Tradex, while other multinationals include Vitol, Helios & Puma Energy (subsidiary of Trafigura) Four major oil trade houses dominate the trade in petroleum products Source: Ecobank Research. 18

19 Section 3 Challenges & Opportunities

20 Overlapping trade blocks complicate trade Each EAC country is a member of a competing trade block Trade blocks & bilateral trade agreements Source: Ecobank Research. 20

21 The costs of trade are high All African regions have worse indicators than rest of world Cross-border trade indicators, 2011 Number of documents required for import/export compares well with other emerging markets But costs to import and export containers are substantially higher Inadequate port and warehousing infrastructure are to blame 21

22 The quality of logistics varies greatly between countries South Africa, Senegal and Uganda lead the field Logistics performance index, 2012 Country Score Customs Infrastructure International shipments Logistics competence Tracking & tracing Timeliness South Africa Senegal Uganda Latin America (ave) East Asia & Pacific (ave) DRC MENA (ave) Tanzania Kenya Nigeria Cameroon Cote d'ivoire Ghana Sub-Saharan Africa (ave) Ethiopia Zambia Angola Source: World Bank Logistics Performance Index SSA ranks lowest of the world s developing regions, and well below its rivals South Africa, Senegal and Uganda are noteable outliers West, Central and East Africa could perform significantly better 22

23 The chukadu

24 The chukadu at work

25 Kasumbalesa Zambia-DRC border

26 Consumption levels are constrained, but rising Sugar consumption, kg per capita, 2010 Palm oil consumption, kg per capita, 2010 Ethiopia Madagascar Mozambique Tanzania SSA average Uganda Zambia Zimbabwe Malawi India Kenya South Africa EU Swaziland Brazil Ethiopia Rwanda Mozambique Zimbabwe DRC SSA Tanzania India EU South Africa Angola West Africa Kenya Indonesia Malaysia Sources: World Bank, ISO, FAOSTAT, Ecobank Research. Average consumption of sugar and palm oil is low High prices & limited supplies have restrained consumption, but strong population growth and urbanisation is increasing demand An emerging African Middle Class will also boost demand as disposable incomes rise 26

27 Nigeria & Ethiopia are set to be major cement exporters Projected to have combined surplus of 50m MT by 2015 Cement deficit/surplus, ;000 MT 35,000 30,000 Nigeria Ethiopia 25,000 20,000 15,000 10,000 5, , e 2013f 2014f 2015f -10,000 Sources: Intracen, Ecobank Research. Both countries ran large deficits, but from 2013 there will be substantial surpluses Even if ambitious targets are not met, sizeable volumes will be available for export to regional markets, creating new opportunities for intra-regional trade finance 27

28 Trade corridors will drive growth in intra-regional trade Pan-African Highway, proposed routes Long-standing trade routes exist along the West African coast and from coastal countries into the interior Major initiatives are under way to promote new trade corridors Some are in early stages (e.g. the LAPSSET project), but others are progressing well (e.g. the Maputo Development Corridor) Key focus on improving coastal route along southern Mediterranean and trade corridors from Atlantic and Pacific Ocean coasts into the interior Trade financiers will need strong understanding of markets and risk 28

29 Thank you