IMF : South Africa plays "engine role" in regional trade

South Africa is the engine of trade on the continent, accounting for 4 percent of total imports from the sub-Saharan Africa and 6 percent of total exports, the International Monetary Fund (IMF) has said. South Africa is a major source of trade in intraregional exports which have a large share of products with higher local value added, the IMF said in a report available to Xinhua on Thursday. "In 2009, manufactured exports accounted for more than 10 percent of intraregional exports, with South Africa accounting for 55 percent of total intraregional manufactured exports, followed by Kenya, accounting for 11 percent," the report said. "Food and beverages account for about 10 percent of intraregional exports, with Madagascar, South Africa, and Zambia being the main exporters of these products," said the report. Intraregional trade was growing, accounting for 14 percent of total trade last year, compared with seven percent in 1990, according to the report. Opportunities for intraregional trade could grow more considerably if barriers were removed -- among them poor transport facilities, said the report. An investment of 20 billion U.S. dollars "for an initial upgrading of sub-Saharan Africa transport infrastructure, followed by one billion dollars in annual spending for maintenance, could expand overland trade among the region's countries by about 250 billion dollars," the IMF said. The region's trade is also growing with other emerging markets. By last year, its share of trade with Brazil, India and China reached about 3 percent, 6 percent and 17 percent respectively, "rising from negligible shares in the 1990s," the report said. But the report noted that with growth in Europe threatening to stall this year, new markets are becoming more important to Africa. Europe has been one of the major destinations for the continent's exports. "Between 1990 and 2010, the share of SSA (sub-Saharan Africa) exports to advanced economies fell from 78 percent to 52 percent; and the share of SSA imports from those countries fell from 73 percent to 43 percent," the report said. Non-traditional partners now account for about 50 percent of sub-Saharan Africa's exports, according to the IMF. The geographic shift had been relatively fast, particularly over the past 10 years, the IMF said. The report said intraregional integration could increase the economies of scale in the region. By making production cheaper, the trend would make goods more competitive, attract foreign direct investment and build up domestic industries in the region, said the report. The IMF stressed the need to use "revenue from resources to improve general education and lifelong learning, finance research and development incentives, strengthen information and communications technology, provide high-quality public infrastructure, as well as strengthen institutions."