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Lower barriers and diversify production
African countries are grappling to undo a legacy dominated by trade with their former colonial rulers rather than with each other.
Nurturing the small-scale sector in Africa
As African countries pursue more trade opportunities, they will also require a dynamic private sector to play a role. In many African countries the private sector is often made up of a few giant multinational corporations at one end and a large but small-scale informal sector at the other. One of the challenges facing African policymakers is how to deal with a small-scale sector that is responsible for a significant portion of production, trade and services.
While the informal sector is "the driving force of most economies in Africa, it is largely unregulated, has little access to finance, is often not taxed and its contribution to the economy is largely unrecorded," says Ms. Adelaide Mkhonza, an assistant secretary-general at the African, Caribbean and Pacific Group of States (ACP), a trading and aid bloc linked with the European Union. Africa cannot continue to ignore this sector if integration is to succeed, notes Ms. Mkhonza. A major critique of current regional integration efforts in Africa is that their design and objectives are driven by a preference for formal rather than informal trade. Ms. Mkhonza views the sector as an effective means of integration from below, as small-scale trade is often conducted and driven by the needs of indigenous traders rather than governments or international agencies.
"There is a real economic integration going on at the informal level," concurs the non-governmental InterAfrica Group (IAG). For many years it has been recognized that many countries' real economies "have been mostly informal and much larger, more dynamic and more regionally integrated than their official economies."
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