This Policy Brief deals with Africa’s potential for intra-regional trade and the major constraints to that potential. The African continent has been trading in large volumes with the outside world, mostly the developed world, since the turn of the 20th century (Alemayehu, 2002). However, formal intra-Africa trade has remained at a low level compared with the continent’s trade with the outside world, constituting no more than 10 per cent of the total annual trade of each REC on the average (ARIA IV, 2010). The direction of Africa’s trade continues to be influenced by the continent’s historical links with the outside world as more than 80 per cent of this trade takes place with markets outside Africa.
Against this backdrop, this Policy Brief examines the potential for African suppliers to supply the African markets, along with their relative comparative advantage vis-à-vis sources outside the continent. This is done by examining the structure of demand and supply of African exports as well as the comparative advantage of African countries in export supply, followed by an analysis of the major constraints to the supply.