Africa eyes industrial growth with zero tariff

To fully capitalize on China's zero-tariff treatment for African exports, African countries should strengthen productivity, develop regional value chains and expand value addition and processing of agricultural and mineral products, experts said.

Speaking during a webinar hosted late last month by the Ghana-based Africa-China Centre for Policy & Advisory, experts said the policy presents African exporters with an opportunity to expand access to the Chinese market.

However, they cautioned that tariff removal alone would not be enough to significantly increase African exports, as businesses continue to face other barriers, including limited productive capacity, infrastructure gaps, certification requirements and logistics challenges.

Linda Calabrese, an economist at ODI Global, an independent think tank, said countries should focus on products they can produce competitively and for which there is strong demand in China.

"Think about what you can gain now, but overall, your bigger prize should be building your productivity, capacity as an efficient producer, and exporting more," she said.

Calabrese said African countries should use the tariff advantage while simultaneously investing in their long-term productive capacity, infrastructure, standards and logistics.

She identified agriculture and agro-processing as areas with significant potential, saying greater processing of commodities such as coffee and cocoa within Africa could help countries move up the value chain.

"Agro-processing is a path to industrialization," she said.

She cited timber as another example, saying African countries could move from exporting raw timber to producing higher-value goods such as furniture.

Similar opportunities exist in the mining sector, where she said countries should process minerals domestically rather than primarily export raw materials.

However, Calabrese cautioned that tariff removal alone would not guarantee increased exports, with African businesses still facing challenges related to certification, transportation, cold-chain infrastructure and competition from efficient producers in other parts of the world.

Sufficient demand

Calabrese said African countries should conduct product-by-product assessments to identify areas where they have a competitive advantage and where Chinese demand is sufficient.

According to Calabrese, about 500 products across 20 African countries could potentially be exported to China in the short term, based on factors including existing production, export capacity, Chinese demand and previous tariff levels.

She urged governments to help businesses understand Chinese standards and certification requirements, while exporters should assess the costs of meeting those requirements before entering the market.

Calabrese also called for greater development of regional value chains, saying cooperation among African countries could help overcome scale limitations and strengthen their ability to supply the Chinese market.

However, she noted that rules of origin under the new arrangement could challenge countries seeking to combine inputs from across Africa while still qualifying for preferential treatment.

Paul Frimpong, founder and executive director of the Africa-China Centre for Policy & Advisory, said African countries should also develop clear, country-specific policies for engaging with China.

Frimpong noted that China has become a major trading partner for countries such as Ghana and has a significant presence in sectors ranging from trade to infrastructure.

edithmutethya@chinadaily.com.cn