‘Look Africa Plan’ approved to boost trade

ISLAMABAD: The government has approved ‘Look Africa Plan’ that intends to boost trade between Pakistan and Africa in upcoming years which is stagnant at around US $ 3 billion per year.

Pakistan’s exports to Africa have been hovering around US $ 1-1.8 billion per year for last five years constituting 6-7 per cent of total exports and overall trade is stagnant at around US $ 3 billion per year.

Listing the salient features of the Plan approved by Secretary and Minister of Commerce, official sources on Thursday said Ministry of Commerce (MoC) has decided to concentrate on top ten African economies to enhance trade i.e. Nigeria, Kenya, South Africa, Morocco, Algeria, Egypt, Sudan, Kenya, Tanzania and Angola as they constitute 78 per cent of total African Gross Domestic product (GDP) in first phase of enhancing engagement.

The sources said in order to start negotiations on bilateral/multilateral trade agreements of market access, Pakistan would engage and offer Preferential Trade Agreement (PTA) to three African Trading Blocks i.e. Southern African Customs Union (SACU), Economic Community of West African States (ECOWAS) and East African Community (EAC).

Joint Working Groups (JWGs) on trade will be established by MoC to engage major African countries to have regular interaction. The Ministry will open new commercial sections in Africa at least in the largest economies including Egypt, Tanzania, Ethiopia, Sudan, and Algeria where Pakistan has resident embassies.

The Ministry of Commerce will appoint Trade Development Officers (local) in African countries where resident Missions are not stationed. They may work under accredited-Ambassador’s supervision.

An Africa Cell is being established in Trade Development Authority of Pakistan, (TDAP) Karachi to obtain input from stakeholders and coordinate efforts to enhance trade with Africa and provide special incentives for Pakistani companies through Strategic Trade Policy Framework (STPF).

The Ministry has been perusing to enhance exports to Africa by concentrating on six sectors including pharmaceuticals and surgical instruments, electrical appliances, rice, wheat, corn etc. textiles, cement and construction materials and services.

The sources said trade fairs are being identified in Africa for meaningful participation, targeting top ten economies. TDAP has been given instructions to finalize list with input from private sector, MOC and Trade Officers.

TDAP/ MOC will arrange Priority Africa for trade seminars in major cities of Pakistan, one such seminar will be organized on sidelines of Expo Pakistan 2017 (November 9-12).

Periodic visits of high level trade delegations will be organized to the largest economies of Africa/trading blocks to engage top leadership.

The Services Trade Development Council and Trade in Services Wing of Ministry are working on plan for export of Pakistani services to Africa.

TDAP has been asked to provide special subsidy (80-90%) to Pakistani companies to encourage their participation in trade exhibitions in Africa and to sponsor delegations to and from Africa on regular basis.

The sources said Look Africa Plan is expected to enhance low tarde volume and will help boost trade ties between Pakistan and Africa.

It is mentioned here that total Trade Volume of Africa in 2015 was US $ 1 trillion (ITC figures) and Pakistan Trade with Africa continent was US $ 3 billion. Pakistan’s share in total trade of African countries is 0.3 per cent.

However, Pakistan’s trade with few countries of Africa such as Morocco and Kenya has registered increasing trends. Exports from Pakistan to Morocco have increased by 55 per cent during 2016-17, amounting to US $ 19.113 million as compared to US $ 12.350 million in 2015-16.

Pakistan exports to Kenya have also increased by 20 per cent from US $ 256.4 million in 2015-16 to US $ 307.8 million in 2016-17.

With regard to reasons, the sources said major factors behind low trade volume with Africa are that MOC has Commercial Sections in only four African Countries – Kenya, South Africa, Nigeria and Morocco.

Pakistan has only one Trade Agreement for Market Access in Africa (with Mauritius).

Pakistan only has 13 JMCs with African countries that is not sufficient for institutional strengthening of both sides. The meetings take place after gap of 5-10 years that leads to ineffective institutional engagement.

Currently Pakistan has Joint Ministerial Commissions (JMCs) with Algeria, Senegal, Morocco, Egypt, Kenya, Libya, Niger, Nigeria, South Africa, Sudan, Tunisia, Uganda, Zimbabwe. It needs to expand to other countries of Africa.

Moreover, out of 54 countries, Pakistan has Resident Missions only in 15 African countries while the remaining 39 countries are covered through accreditation.

The other reason is low frequency of interaction of private sector.