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Cape Town – Half of Africa’s trade will be with Brics countries by 2030, according to Goolam Ballim, chief economist of Standard Bank.
Currently about a fifth of all of Africa’s trade is with Brics countries (Brazil, Russia, India, China and South Africa).
Ballim was a guest speaker at the 8th Africa Trade Finance Week taking place in Cape Town until Wednesday.
He said China’s trade dominates the collective Brics trade on the continent, presenting about two thirds thereof.
“We expect sub-Saharan Africa to break two records in 2014,” said Ballim.
“In 2014 the region will be the fastest growing in the world, with growth increasing from 5% in 2013 to 6% in 2014.”
The second record will be that inflation is expected to fall below the growth rate for the first time.
Ballim also mentioned the “firm and sustained consumer thrust” in sub-Saharan Africa. This trend will lead to a better quality of economic growth.
“Africa will have to produce stuff that Africa wants,” he said.
E7 vs G7
In 2009 the so-called E7 emerging markets (the Brics countries and Indonesia, Mexico and Turkey) had an income share of two thirds that of the so-called G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the US).
By 2050 this share of the E7 is likely to be double the production of the G7.
Emerging markets already have about half of the world’s trade and south-south trade is becoming more and more of a trend, said Ballim.
In 1980 Bric trade in Africa was less than 1% of Africa’s trade and it was mostly with old colonial powers. By 2008 Bric accounted for about a fifth of Africa’s trade.
China dominates the flows with about two thirds of the collective Brics trade in Africa.
Intra-regional trade
Ballim said it is important for Africa to increase its internal and regional trade. Currently only about 10% of Africa’s trade is within the continent, while intra-regional trade is about 25% in Latin America and 50% in Asia.
East Africa has the most regionally integrated trade, namely about 45% of trade in the region.
“Africa will have to become a price maker and not a price taker and its growth will have to be based more on manufacturing than merely resources,” said Ballim.
Currently about a fifth of all of Africa’s trade is with Brics countries (Brazil, Russia, India, China and South Africa).
Ballim was a guest speaker at the 8th Africa Trade Finance Week taking place in Cape Town until Wednesday.
He said China’s trade dominates the collective Brics trade on the continent, presenting about two thirds thereof.
“We expect sub-Saharan Africa to break two records in 2014,” said Ballim.
“In 2014 the region will be the fastest growing in the world, with growth increasing from 5% in 2013 to 6% in 2014.”
The second record will be that inflation is expected to fall below the growth rate for the first time.
Ballim also mentioned the “firm and sustained consumer thrust” in sub-Saharan Africa. This trend will lead to a better quality of economic growth.
“Africa will have to produce stuff that Africa wants,” he said.
E7 vs G7
In 2009 the so-called E7 emerging markets (the Brics countries and Indonesia, Mexico and Turkey) had an income share of two thirds that of the so-called G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the US).
By 2050 this share of the E7 is likely to be double the production of the G7.
Emerging markets already have about half of the world’s trade and south-south trade is becoming more and more of a trend, said Ballim.
In 1980 Bric trade in Africa was less than 1% of Africa’s trade and it was mostly with old colonial powers. By 2008 Bric accounted for about a fifth of Africa’s trade.
China dominates the flows with about two thirds of the collective Brics trade in Africa.
Intra-regional trade
Ballim said it is important for Africa to increase its internal and regional trade. Currently only about 10% of Africa’s trade is within the continent, while intra-regional trade is about 25% in Latin America and 50% in Asia.
East Africa has the most regionally integrated trade, namely about 45% of trade in the region.
“Africa will have to become a price maker and not a price taker and its growth will have to be based more on manufacturing than merely resources,” said Ballim.
