Amazing growth in Africa-China corridor
This is according to Vinod Madhavan, head of trade for the Standard Bank Group, who spoke to Business Report on Friday on the sidelines of Global Trade Review Africa 2019, which took place at the Cape Town International Convention Centre.
Madhavan said the world was looking at other trade corridors and the Africa-China corridor had been growing at a phenomenal pace.
“To my mind, that is a very key corridor to focus on. The second trade corridor that I feel very bullish about is the intra-Africa trade,” he said.
Madhavan said with the intra-Africa trade, Africa does 83 to 85percent of its trade with countries outside Africa, rather than internally.
He said this was because Africa was not connected and the infrastructure was not there.
“It was much more cost-efficient to do trade overseas than over land. But this is changing.
"As we see it, the sentiment is geared towards making Africa more internet connected.
"The Africa Continental Free Trade Area agreement has had 44 nations sign it. Eight of them have ratified it, South Africa has ratified it, we as an industry are waiting to see when Nigeria will come on board,” said Madhavan.
He said when the US and China refused to trade with each other, due to the US-China trade war, they both looked towards other nations and continents that could meet the need.
“A simple example is fabrics. China is the largest user of fabrics, they import a large number of fabrics from America, but ever since the trade war happened (US-China trade war), they have looked towards other markets.
"They looked towards Europe and in the third quarter last year and from the first and second quarter this year, they are looking towards the southern hemisphere,” said Madhavan.
On how Brexit could impact trade with South Africa and other markets on the continent, he said the impact might not be that high.