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The initiatives to increase intra-African trade that Africa really needs

It is sufficient to visit a few supermarkets and outlets in Africa to realize that the vast majority of products that are sold in the continent are imported from third countries. Although today all African countries are engaged in the production of consumer goods, Africans still seem to prefer imported goods to local products. The reasons? They are many.

A first reason is that foreign-produced goods are generally perceived as having a higher value because of their highly recognizability among consumers. African firms, on the other hand, invest little in marketing, advertising and communication activities, that being capital-intensive, are out of reach for many of them.

Second: attractiveness. African products are perceived by African consumers as inferior in quality and reliability compared to the imported ones. This is because many African firms pay little attention to their branding and packaging. When a product is lined up on a shelf together with other products, consumers’ choices are driven not only by their ability to afford its cost, but also by psychological factors. And today, the strategies that most of companies use to attract customers to their products are focused on how to increase the recognizability of their brands. Which in many cases can be done just by improving the packaging of their goods.

Third factor: Price. African-made products are generally more expensive than imported products. This happens because transport prices of products from the places of manufacturing to where they are consumed are excessively high due to the poor condition of infrastructure, the high air transport costs, long procedures at inland borders, non-tariff barriers and other small problems that incrementally inflate prices of goods in Africa. Moreover, immaterial inputs that are incorporated in the manufacture of such products (such as water and electricity) are generally more expensive in Africa that in developed economies.

At a time in history when all efforts, at continental, regional and national levels, are focused on the creation of a single African market based on accelerating the industrialization of the continent and on increasing intra-African trade, neglecting these factors risks to be a fatal mistake.

If companies don't do it, then governments can.

That is why Kenya and Ghana, two among the first countries who have signed and ratified the African Continental Free Trade Area (AfCFTA), have recently launched a project for opening an Export Trade House (ETH) in Nairobi, to serve as a one-stop wholesale outlet for all Made-in Ghana products.

This initiative is aimed at increasing the awareness by Kenyan consumers of Ghanaian products and brands. Its purpose is to support the introduction of such goods into the Kenyan market so to encourage their purchase by local consumers. The Ghana ETH, expected to be opened in May 2023, will be hosted in one of the biggest industrial parks in Nairobi, and will offer to visitors an information desk where potential buyers can receive information about Ghanaian products and their manufacturers. Future plans also include the opening of a showroom where a wide variety of made-in-Ghana products will be displayed to the public, as well as a website offering a virtual tour of the space.

However, this is not the first initiative of such a kind. In August 2022, also the Nigeria Export Promotion Council opened an ETH in Nairobi, announcing a strategy that aims at opening, in partnership with other private actors, similar platforms for sale of Nigerian products in other African countries and abroad.

Outside Africa, similar initiatives have been launched by public actors. The regional government of Campania (Italy), for instance, opened in July 2018 a showroom in New York on the Fifth Avenue, in an attempt to increase awareness of the Campania's products of excellence in the US and reach local buyers interested in their purchase.

These are the concrete initiatives that Africa needs to put in place to increase awareness of its products. Among African consumers, and not only.

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