SPEAKER:

Dr Evans Mupela
EPD, HSRC

Date:  Tuesday, 11 August    

Time: 12:30  – 13:30

Venue:    VCRs, Pretoria, Cape Town, Durban

The HSRC seminar series is funded by the Department of Science and Technology (DST). The views and opinions expressed therein as well as findings and statements of the seminar series do not necessarily represent the views of DST.

One of the recommendations of the recently ended World Economic Forum on Africa in Cape Town was the call to increase intra-African trade. There seems to be consensus that an increase in intra-African trade will contribute to faster growth rates of African economies. A quick look at the data however reveals that trade amongst African countries is very low. This is in contrast to trade between African and developed countries outside the continent. It could be argued that this is mainly a result of the higher differentiation in products between African countries and advanced economies. A closer look however reveals that trade amongst African countries is influenced by distance and the cost of communications. This study presents preliminary indications of evidence that distance and the cost of communications affect trade intensity outcomes among countries on the continent.

The impact of the cost of information gathering and transmission of messages has often been neglected or has been subsumed under transport costs or border related trade barriers. It is however important to model these costs separately as the share of services in world trade has increased dramatically over the last three decades and advances in information and communication technology (ICT) have made distance seem less important in the setup of trade transactions.  The study empirically tests the hypothesis that high communication costs in Sub Saharan Africa have a negative impact on the intensity of trade between African countries. While trade intensity with ex colonial masters and allies is easily facilitated by negotiated trade pacts, intra-African trade suffers from poor international transport infrastructure and high communication costs. The results point to the need for further transformation in the transport infrastructure and  ICT sectors in Africa to bring down the costs of transport, international voice, data and messaging systems to facilitate the actualization of higher trade outcomes among African countries.

The seminar may be attended in Pretoria, Cape Town or Durban

RSVP by 7 August

Cape Town: Carmen August (021) 466 7827, caugust@hsrc.ac.za   12th Floor, Plein Park Building, Plein Street, Cape Town
Durban: Ridhwaan Khan (031) 242 5400, rkhan@hsrc.ac.za   1st Floor, 750 Francois Road, Ntuthuko Junction, Pods 5 and 6, Cato Manor
Pretoria: Arlene Grossberg (012) 302 2811, acgrossberg@hsrc.ac.za  1st  Floor, HSRC Building, 134 Pretorius Street, Pretoria