Jul

Trade integration key to reduce poverty and support growth in Africa

2015-07-16 16:23
Charles Brewer, MD of DHL Express Sub-Saharan Africa: “There needs to be a collaborative effort between the public and private sector to work together to ease doing business across borders.”

Africa continues to remain vastly unexplored and making Africa’s most remote regions accessible for trade will not only promote prosperity in those regions but also elevate the continent’s continued growth path.

This is according to Charles Brewer, managing director of DHL Express Sub-Saharan Africa, commenting on The Role of Trade in Ending Poverty1 report recently released by the World Bank Group and World Trade Organisation.

Explaining the role that international trade plays in development and poverty reduction in Africa, the report states that the value of trade is measured by the extent to which it delivers better livelihoods, measured through higher incomes, greater variety of choice and a more sustainable future, among others.

“While countries need to continue to establish better trade relations with international partners, enabling trade routes within the continent can yield numerous benefits for the region and its people,” says Brewer.

Having entered the African market in 1978 when the continent was still relatively ‘unknown’, Brewer says that DHL has explored the remotest of regions in Africa and witnessed these areas transform; both economically and socially, simply due to access to new services.

To effectively reduce poverty, growth needs to be inclusive and poor people aren’t often located where growth takes place. The World Bank and The World Trade Organization estimate that one billion (15%) of the world’s population remain in extreme poverty and that of this number, 415 million are concentrated in Sub-Saharan Africa. The report states that extreme poverty in many countries is predominately a rural phenomenon and that an estimated 75% of the extreme poor in Africa live in rural areas.1

Dr Jim Yong Kim, World Bank Group President, says that beyond expanding trade, more must be done, such as building roads that connect farmers to markets: “We must always connect the poorest to trade opportunities.” 2

Brewer says that connecting rural areas to trade opportunities is a key focus for DHL Express in Sub-Saharan Africa.

“We have made great progress in making the global market and the world at large more accessible and connected by increasing the number of points where customers can access DHL and our global network. We now have over 4 500 retail outlets across Sub-Saharan Africa offering DHL services. This allows anyone – from a student to a small business –access over 220 countries and destinations that we serve.”

The report paints trade as a key enabler of facilitating growth in developing countries and highlights that lower trade costs and fewer barriers between countries is vital to eliminating extreme poverty.

“Trade plays an essential role in driving private sector-led growth and job creation and can be a powerful force in reducing poverty and increasing incomes,” says Dr Kim2. The World Bank3 has already implemented measures to facilitate trade by approving a US$100 million Development Policy credit to help the governments of Burkina Faso and Cote d’Ivoire reduce trade and transport transaction costs.

“There needs to be a collaborative effort between the public and private sector to work together to ease doing business across borders. We work very closely with the government and custom authorities in each country on solutions to make doing business easier. There is on-going progress with a number of successful trade blocs in place focusing on better connecting the region, and we look forward to seeing Africa continue on its growth path in years to come,” says Brewer.

References:

1 All statistics sourced from The Role of Trade in Ending Poverty report, jointly written by the World Bank Group and World Trade Organisation (With the exception where stated).

2 World Trade Organization > News item: Lower trade barriers, stronger global trading system can help end extreme poverty

3 The World Bank press release: With WB Support, Burkina Faso and Côte d’Ivoire Commit to Trade and Transport Sector Reforms

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