pak africa trade final
TRANSCRIPT
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African Region Export Strategy
Prepared by:
Asad Hayaud-Din
Dr. Kausar Ali Zaidi
Abu-al-Hassan
Waqas Ahmed
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Index
Topics Page#
Introduction 03
Pak-Africa Relations 06
Important Countries of Africa 06
Main Trade Agreements 09
Pakistans Export Strategy for Africa 13
Trade Statistics of Pakistan with African Countries 14
Major Export destinations in Africa 15
Pakistani Diaspora in Africa 15
Potential Scope of Pakistani Products 16
Bottlenecks 18
Recommendations 19
Ports in Africa (Map) 21
Business Opportunities in Africa 22
Exhibitions in Africa 24
Introduction
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Africa is the world's second-largest and second-most-populouscontinent of the world including
area 30,221,532 km2. Africa's largest country is Algeria, and its smallest country is the
Seychelles. It is the hottest continent on earth; dry lands and deserts comprise 60% of the
entire land surface.
Although Africa has abundantnatural resources but it remains the world's poorest and most
underdeveloped continent, the result of a variety of causes that may include the spread of
deadly diseases (notably HIV/AIDS and malaria), corrupt governments that have often
committed serioushuman rights violations,failedcentral planning,high levels ofilliteracy,lack
of access to foreign capital, and frequent tribal and military conflict. During the president of the
United States Barack Obama's visit to Africa he announced a $7 billion plan to build more
power plants, invest in institutions, and work more closely with African heads of state. He also
unveiled a new program, Trade Africa, to boost imports and exports both with and within the
continent, starting with the East African region known as the EAC.
Geographically Africa is divided in following territories:
Central Africa (Middle Africa)
Country Annual GDP
growth 2010
Annual GDP
growth 2011
Annual GDP
growth 2012
Import of
goods and
services
(annual
%growth)
2011
Export of
goods and
services
(annual
%growth)
2011
Angola 3.40 3.91 6.83 18.59 -6.34Cameroon 3.3 4.1 4.7 14.94 11.47
Central Africa
Republic
1.7 3.3 3.1 . .
Chad 13 1.6 5.02 . .
Congo-Brazzaville 8.75 3.42 3.79 9.97 18.14
Congo-Kinshasa 7.17 6.87 7.15 5.37 20.96
Equatorial
Guinea
-1.68 4.94 2.5 3.84 6.15
Gabon 6.7 7 6.1 ...
Sao Tome and
Principe
4.51 4.94 4
Eastern Africa
http://en.wikipedia.org/wiki/Continenthttp://en.wikipedia.org/wiki/Algeriahttp://en.wikipedia.org/wiki/Seychelleshttp://en.wikipedia.org/wiki/Natural_resourcehttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Diseasehttp://en.wikipedia.org/wiki/HIVhttp://en.wikipedia.org/wiki/AIDShttp://en.wikipedia.org/wiki/Malariahttp://en.wikipedia.org/wiki/Corruption_Perceptions_Indexhttp://en.wikipedia.org/wiki/Human_rights_violationshttp://en.wikipedia.org/wiki/Central_planninghttp://en.wikipedia.org/wiki/Illiteracyhttp://online.wsj.com/article/SB10001424127887323936404578577862807993572.htmlhttp://online.wsj.com/article/SB10001424127887323936404578577862807993572.htmlhttp://en.wikipedia.org/wiki/Illiteracyhttp://en.wikipedia.org/wiki/Central_planninghttp://en.wikipedia.org/wiki/Human_rights_violationshttp://en.wikipedia.org/wiki/Corruption_Perceptions_Indexhttp://en.wikipedia.org/wiki/Malariahttp://en.wikipedia.org/wiki/AIDShttp://en.wikipedia.org/wiki/HIVhttp://en.wikipedia.org/wiki/Diseasehttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Natural_resourcehttp://en.wikipedia.org/wiki/Seychelleshttp://en.wikipedia.org/wiki/Algeriahttp://en.wikipedia.org/wiki/Continent -
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Burundi 3.78 4.19 4.03 -14.58 1.74
Comoros 2.05 2.22 2.96
Djibouti 5.0 3.5 3.5 ...
Eritrea 2.19 8.67 7.10 10.56 233.06
Ethiopia 9.93 7.29 8.5 -5.47 2.67
Kenya 5.80 4.37 4.55 15.61 6.62Madagascar 0.52 1.86 3.1
Malawi 6.53 4.34 1.88 -8.69 4.62
Mauritius 7.68 3.76 3.16
Mozambique 7.08 7.32 7.4 11.06 4.18
Rwanda 7.21 8.23 7.98 14.35 47.67
Seychelles 7.12 5 2.9
Somalia 2.6
Tanzania 7.04 6.44 6.85 47.94 27.49
Uganda 5.86 6.62 3.42 5.91 13.17
Zambia 7.62 6.83 7.31 14.95 2.39
Zimbabwe 9.62 9.37 5.01 20.21 17.73
Northern Africa
Algeria 3.6 2.4 2.5
Egypt 5.13 1.77 2.14 8.40 1.24
Libya -1.4 3.7 -59.7
Morocco 3.64 4.98 2.69 5.03 2.12
South Sudan 4.21 1.92 -55.81 8.37 -2.12
Sudan 3.47 -3.29 -10.1
Tunisia 3 -2 3.6 -9.17 -3.87
Southern Africa
Botswana 8.59 6.07 3.69 19.22 27.54
Lesotho 7.86 3.73 3.96 4.59 1.52
Namibia 6.27 5.67 5.01 -0.14 -8.15
South Africa 3.08 3.45 2.54 9.71 5.93
Swaziland 1.2 1.9 0.7 5.23 19.73
Western Africa
Benin 2.55 3.53 5.399 Burkina Faso 7.93 4.21 10.03 19.32 32.36
Cape Verde 5.20 5.04 4.29
Cote dlvoire 2.39 -4.72 9.49
Gambia 6.52 -4.29 6.01 -4.29 17.59
Ghana 8.04 15.07 7.91 47.72 30.13
Guinea 1.93 3.90 3.94
Guinea Bissau 1.71 5.7 -1.5
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Liberia 10.9 9.44 10.8 7.15 2.53
Mali 5.81 2.73 -1.18
Mauritania 5.08 3.95 7.56 10.92 5.23
Niger -7.96 2.29 11.2
Nigeria 7.97 7.355 6.55
Senegal 4.13 2.63 3.96 6.88 3.11Sierra Leone 5.44 6.02 15.2 63.77 -2.02
Togo 3.99 4.79 5.62 8.38 10.73
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6
Pak-Africa Relations
The independent African states and Pakistan are among the developing countries which are
aiming at rapid development and economic independence. Pakistan shares with the African
nations more or less a common background and similar post independence problems.
Therefore, Pakistan has sought closer economic, social and cultural cooperation with the
African nation states. Since independence Pakistan has staunchly supported Africas efforts to
rid the continent of colonialism and racialism.
Pakistan and South Africa have tremendous scope to improve trade and economic relations. At
present, the trade between the two countries is very nominal as South Africa's trade with world
is US $75 to US $ 80 billion and its trade with Pakistan is less than one percent of its total trade.
One of delegation head of South Africa said that his country was in need of experts in science
and mathematics fields and offered that joint ventures to tap the potential of mining sector of
Pakistan. South Africa has expertise in this field and has been using modern technology.
Pakistan has one of the finest quality coals and South Africa is ready to assist Pakistan in
exploiting its coal reserves for power generation.
Beside that South Africa also offers excellent transport facilities including ports and
international airports for the exports of goods. African continent is the second fastest growing
region after Asia and Pakistani businessmen could achieve lucrative results by improving trade
cooperation with South Africa. South Africa is rich in mineral and other natural resources and
wishes to encourage Pakistani investors to set up manufacturing plants in South Africa. They
offer many attractive incentives to investors and more importantly South Africa is regarded as a
gateway into Africa.
Important Countries of Africa
Nigeria (English Speaking) - The most populated African country at 160+ million. The country
has an extraordinary amount of oil wealth. It is a giant on the continent. Nigerians are found in
large numbers throughout the continent, and are sometimes seen as a bit of a menace/drain in
the countries they inhabit.
South Africa (English Speaking) - The economic giant of the continent, it has a much higher
standard of living than most of the rest of the continent, however there are still huge swathesof population living in abject poverty. Johannesburg alone accounts for 10% of the entire
economy of the entire continent. Gold and mineral wealth abounds, diamonds and a healthy
manufacturing sector contribute to it's wealth. It is also notable for the fairly large (~12%) white
population.
Ethiopia (Amharic Speaking) - Is another giant in terms of population, but is incredibly poor,
with a much undeveloped agricultural economy. However, it seems to exert a lot of influence
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across the continent. Ethiopia has one of the most distinct cultures on the continent, with the
only written dialect originating on the African continent. It was also the only Sub-Saharan
African country to not be fully colonized by a European power.
Democratic Republic of Congo (French Speaking) -This is hardly a functioning state, but should
be noted for it's sheer size and potentially massive wealth of resources. The country is huge andvirtually ungovernable, but even though it has huge areas of untouched natural areas it also has
a sizable population. It is one of the last "Wild West's" in the world.
Egypt (Arabic Speaking) - A massive population and definitely an African power, but their face is
firmly pointed towards the Middle-East. The country does have a lot of influence and power,
but it does not concern itself in African affairs as much as it does towards the ME. It does have
some money, but huge portions of the population are very poor.
Ghana(English Speaking) - Not the most populated or richest, but probably the most successful
country in terms of fostering a healthy, stable democracy, good governance, and an extremely
fast growing economy. It has a lot of potential and has been very well managed. It has the
corruption associated with any under-developed country, but it has a well educated middle
class growing healthily.
Kenya (English Speaking) - Kenya is the typical safari tourist destination that is often seen on
nature shows. Nomadic tribes and hordes of animals dot the landscape. It is very diverse with
desolate lawlessness out backs towards the Ethiopian and Somali borders, but it also has a very
sophisticated and cosmopolitan urban life in Nairobi, with a decent population of descendants
of Indian laborers brought by the British. More often than not these Indians are very wealthy
indeed.
Tanzania (English Speaking) - A huge country that is home to widely spread-out towns and
agricultural communities. Some of these outposts can be pretty isolated and poor, but like
Kenya, the primary city Dar Es Salaam is pretty happening and is home to all kinds of wealthy
people, as well as slums like Nairobi. Off the coast of Tanzania is the tourist destination of
Zanzibar, an idyllic and beautiful place, formerly the seat of the Sultan of Oman. For this reason
this island and the coasts of Tanzania and Kenya are much more Islamic than the interior.
Uganda (English Speaking) - Uganda is a beautiful little gem of a country, very densely
populated in the lush green hills dotted by lakes, rivers and waterfalls. Like Tanzania and Kenya
it is encircling part of the massive Lake Victoria. They just discovered oil under one of the lakes;
could mean riches, could mean trouble, most likely both.
Mali (French Officially) - Mali is a country smack dab in the heart of the Sahara desert where all
population centres are formed along rivers and trade routes. It is a vast country of considerable
wealth in the form of gold and minerals. Before Columbus sailed the ocean blue, it used to
provide most of Europe and the Middle-East with gold for trade, during this time it had a large
population of some of the worldsleading scholars and intellectuals (Timbuktu). However with
the influx of New World gold the Malian Empire collapsed. These days it is a cultural tour de
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force, with a healthy music scene and unique culture. Unfortunately, nomadic tribesmen from
the north have gotten hold of Libyan arms that have been circulating since the fall of Gaddafi,
and they are causing trouble in the northern half of the country.
Libya (Arabic) - Libya has a very small population of ~6 or 7 million (compared to Egypt with 90
million+), and it has an extraordinary amount of oil wealth. Under Gaddafi people actually livedpretty well, with a government social structure that provided education and healthcare as well
as other benefits. However, much of Libya's story is the story of Moamar Gaddafi, during his
rule from 1969-2011 he ammassed a huge military stock-pile and was constantly meddling in
the affairs of other countries. He used to fund insurgencies in the Philippines, Thailand and
even gave support to the Irish Republican Army (terrorists), just to destabilize his enemies and
possibly gain favour with some new regime.
Rwanda - (French Officially, Changing to English) - Rwanda is a tiny country known mainly for
the genocide they had in 1994 where some 800,000 people were killed. However this horrible
past does not paint an accurate picture of the country today. Today it is one of the most orderly
and peacefully prosperous countries on the continent. It is being lead by a very smart president,
Mr Paul Kagame, like Uganda's Museveni he is also a former rebel commander, but he has been
very proactive in moving the country forward. It has attracted alot of positive attention in
recent years for being a very promising little country. Rwanda siphons off hundreds of millions
of dollars from the Eastern Congo through various means that are somewhat unlawful. It is
receiving alot of foreign investment and is also one to watch.
Zimbabwe (Speaks English) - Zimbabwe is a shell of it's former self. It is important for it's
potential and for the role it used to play on the continent, but few countries have experienced
such a fall from grace like Zimbabwe. Like South Africa it used to be home to a significant white
population that also used to govern the country, but the majority has left due to "land
reclamations" and maltreatment by the horrible regime of Robert Mugabe who took over in
1980. It is also one of the most beautiful countries on this green earth.
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Main Trade Agreements between South Africa and the rest of the World
Customs UnionSouthern African
Customs Union
(SACU)
Customs
Union
South Africa,
Botswana,
Lesotho,
Namibia and
Swaziland
Duty free
movement of
goods with a
common external
tariff on goods
entering any of
the countries from
outside the SACU
All products
Free Trade Agreements (FTAs)
Southern African
Development
Community(SADC) FTA
Free Trade
Agreement
Between 12
SADC Member
States
A FTA, with 85%
duty-free trade
achieved in 2008.The 15% of trade,
constituting the
"sensitive list", is
expected to be
liberalised from
2009 to 2012
when SADC attains
the status of a
fully-fledged FTA
with almost all
tariff lines tradedduty free.
Most products
Trade,
Development and
Cooperation
Agreement
(TDCA)
Free Trade
Agreement
South Africa
and the
European
Union (EU)
The EU offered to
liberalise 95% of
its duties on South
African originating
products by 2010.
In turn, by 2012,
South Africa
offered to
liberalise 86% ofits duties on EU
originating
products.
There is currently
a review of the
agreement
underway, which
is aimed at
broadening the
scope of product
coverage. This is
taking place underthe auspices of the
Economic
Partnership
Agreement (EPA)
negotiations
between SADC
and the EU
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EFTA-SACU Free
Trade Agreement
(FTA)
Free Trade
Agreement
SACU and the
European Free
Trade
Association
(EFTA) -Iceland,
Liechtenstein,Norway and
Switzerland
Tariff reductions
on selected goods
Industrial goods
(including fish and
other marine
products) and
processed
agriculturalproducts. Basic
agricultural
products are
covered by
bilateral
agreements with
individual EFTA
States
Preferential Trade Agreements (PTAs)SACU-Southern
Common Market
(Mercosur) PTA
Preferential
Trade
Agreement
SACU and
Argentina,
Brazil, Paraguay
and Uruguay
Tariff reductions
on selected goods.
It is not expected
to enter into force
before some time
in 2012
About 1,000
product lines on
each side of the
border
Zimbabwe/South
Africa bilateral
trade agreement
Bilateral
Preferential
Trade
Agreement
South Africa
and Zimbabwe
Preferential rates
of duty, rebates
and quotas on
certain goods
traded betweenthe two countries
Selected goods. A
most recent
version of the
agreement was
signed in August1996, which
lowers tariffs and
quotas on textile
imports into South
Africa.
Non-reciprocal Trade Arrangements
Generalised
System of
Preferences (GSP)
Unilateral
preferences
granted underthe enabling
clause of the
WTO that are
not
contractually
binding upon
the
Offered to
South Africa as
developingcountry by the
EU, Norway,
Switzerland,
Russia, Turkey,
the US, Canada
and Japan
Products from
developing
countries qualifyfor preferential
market access
Specified
industrial and
agriculturalproducts
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benefactors
Africa Growth
and Opportunity
Act (AGOA)
Unilateral
assistance
measure
Granted by the
US to 39 Sub-
Saharan African
(SSA) countries
Preferential access
to the US market
through lower
tariffs or no tariffs
on some products
Duty free access
to the US market
under the
combined
AGOA/GSPprogramme stands
at approximately
7,000 product
tariff lines.
Other Agreements
Trade,
Investment and
Development
CooperationAgreement
(TIDCA)
Cooperative
framework
agreement
SACU and US Makes provision
for the parties to
negotiate and sign
agreementsrelating to sanitary
and phyto-sanitary
measures (SPS),
customs
cooperation and
technical barriers
to trade (TBT). It
also establishes a
forum of
engagement of
any matters ofmutual interest,
including capacity-
building and trade
and investment
promotion.
None
Trade and
Investment
Framework
Agreement (TIFA)
Bilateral
agreement
South Africa
and US
Provides a
bilateral forum for
the two countries
to address issues
of interest,including AGOA,
TIDCA, trade and
investment
promotion, non-
tariff barriers, SPS,
infrastructure and
others.
None
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Current Trade Negotiations
SACU-India PTA Preferential
Trade
Agreement
SACU and India Tariff reductions
on selected goods
SACU and India
are in the process
of exchanging
tariff requestsSADC-EAC-
COMESA
Tripartite FTA
Free Trade
Agreement
26 countries
with a
combined GDP
of US$860
billion and a
combined
population of
approximately
590 million
people
The Tripartite
Framework
derives its basis
from the Lagos
Plan of Action and
the Abuja Treaty
establishing the
African Economic
Community (AEC),
which requiresrationalization of
the continent's
regional economic
communities. The
FTA will be
negotiated over
the next three
years, with the
possibility of an
additional two
years forcompletion.
The Tripartite
initiative
comprises three
pillars that will be
pursued
concurrently, in
order to ensure an
equitable spread
of the benefits of
regionalintegration:
market
integration,
infrastructure
development and
industrial
development. The
FTA will, as a first
phase, cover only
trade in goods;
services and othertrade-related
areas will be
covered in a
second phase.
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Pakistans Export Strategy for Africa
Export, Imports and Trade Deficit has been a critical issue in our national economic history. We
have been having severe energy crises and critical law and order situation with war on terror on
the ground. In July 2010-2011 Pakistan total export growth was 28.97% and import growth was
18.32%. But in 2011-2012 Pakistan total export growth was 0.09% and import growth 18.33.
Here we are concern to increase Pakistan export to Africa. Southern African Customs Union
(SACU) consists of South Africa, Botswana, Lesotho, Namibia and Swaziland. SACU is
increasingly involved in bilateral FTAs with foreign trade partners. In 2006, SACU also signed an
FTA with theEuropean Free Trade Area (EFTA). African countries are rich in gold, diamond, oil
and other minerals while mountains, rivers, deserts and precious minerals exist in Pakistan. So,
there is a need for taking concrete measures for promoting trade between Pakistan and African
countries. Pak-Africa collaboration in economic, trade and commerce is quite below the desired
level. There is a need to generate more trade and commerce as well as to have a proactive
policy for further cementing brotherly relation. What should be strategy for that is given below
in some points:
At present our exports are highly concentrated in five products namely cotton, leather,
rice, synthetic and textiles which account for 78% of our exports. These items are
generally of low quality and low priced in the international market compared to other
competitive countries. Pakistan is gradually moving towards not only higher value added
products in export of textile manufactures but have added ten more sectors like
engineering goods, marble and granite, fisheries, IT and finance and accounting services
etc., for increasing earning in exports. In addition to diversification of products, newmarkets for the Pakistan's goods can be explored in African countries, South America,
Russia Eastern Europe etc.
Our leather and foot wear sector has significant export potential. The government
should take initiative of research and development support to this sector.
If a product is unique or has important features that are hard to duplicate abroad,
chances are good for finding an export market. So Pakistan has to find those unique
products for African export where competition may be nonexistent or very slight, while
demand may be quite high.
Pakistan and South African should consider signing a free trade agreement and as a firststep, both countries should sign a EHP to improve trade.
Good friendly relations between South Africa and Pakistan should be translated into
thriving trade and economic relations as bilateral trade is confined to few items and
needs to be diversified to take it beyond US$ 1 billion by 2015.
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Exhibition of Pakistani products in the African metropolitan countries would be a
welcoming step and these exhibitions will help in promoting trade and economic
relations between Pakistan and African countries.
Regular exchange of visits among Africa and Pakistani exhibitions and seminars on trade
promotion should be encouraged. This will facilitate identification of areas wheremutual trade and investment are feasible.
With the approach of exporting indirectly through intermediaries, a company engages
the services of an intermediary firm capable of finding foreign markets and buyers for its
products. Export management companies (EMCs), export trading companies (ETCs),
international trade consultants, and other intermediaries can give the exporter access to
well established expertise and trade contacts. Yet, the exporter can still retain
considerable control over the process and can realize some of the other benefits of
exporting, such as learning more about foreign competitors, new technologies, and
other market opportunities. South Africa should consider establish direct air links and shipping with Pakistan to
facilitate bilateral trade.
Trade bodies of both countries should visit and meet on regular basis to create business
friendly relationship exploring new trade avenues. Such visits are usually followed by
beneficial fallouts by way of useful discussions, signing of agreements and MoUs which
facilitate trade, and enhance diplomatic understanding.
Pakistan has recorded significant achievement in the fields of science and technology,
information technology, telecommunications, agriculture and agro allied industries. In
any of the above fields, Pakistani experience share with African countries will be very
invaluable. This is particularly the case in matters concerning bio-technology, alternative
energy source and above all water management and irrigation being domains where
Pakistan has made great strides.
Trade Statistics of Pakistan with African Countries for last three years are:
Region Avg. Export (last 3
years) US$ Million
Avg. Imports (last 3
years) US$ Million
Trade Balance
(US$ Million)
Eastern Africa 593.730 351.900 241.830
Central Africa 58.080 5.200 52.880
Northern Africa 297.550 520.670 (223.12)
Southern Africa 264.940 347.330 (109.39)
Western Africa 327.940 74.970 252.97
Total (Africa) 1542.240 1327.070 215.17
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Major Export destinations in Africa are:
REGION COUNTRIES
Eastern Africa Kenya, Madagascar, Somalia, Tanzania, Mozambique, Djibouti
Mauritius and Comoros etc
Central Africa Cameron, Liberia
Northern Africa Egypt, Sudan, Algeria, Morocco, Tunisia and Libya etcSouthern Africa South Africa and Lesotho
Western Africa Benin, Guinea, Ghana, Cote d Ivoire, Nigeria, Sierra Leone, Togo
etc.
Major Export Product are Rice, Textile & Made ups, Leather Products, Cement, Sugar, Tractors,
Chemicals, Tents & Camping Equipment and Light Engineering Goods.
Various Institutional mechanisms with African Countries are:
I. Pak-South Africa Joint Ministerial Council (Estab.1999, Last Session in April, 2013)
II.
Pak-Tunisia Joint Ministerial Council (Estab.1992, Last Session in2010)
III. Pak- Senegal Joint Ministerial Council (Estab.2001, No Session held)
IV. Pak-Togo Joint Ministerial Council (proposed on agreement)
V. Pak-Morocco Joint Ministerial Council (Estab.2001, Last Session 2008)
VI. Pak-Angola Joint Ministerial Council (Proposed, no agreement so far)
VII. Pak-Tanzania Joint Ministerial Council (Proposed, no agreement so far)
VIII.
Pak-Libya Joint Ministerial Council (Estab.1974, Last Session in 1998)
IX. Pak-Sudan Joint Ministerial Council (Estab.1991, Last Session in 1996)
X. Pak-Egypt Joint Ministerial Council (Estab.1989)
XI. Pak-Kenya Joint Ministerial Council (Estab.1984, Last Session in 1995)
XII.
Pak- Ethiopia Joint Ministerial Council (Proposed, No agreement so far )
XIII. Pak- Algeria Joint Ministerial Council (Estab.1987, Last Session in 2012)
XIV. Pak- Zimbabwe Joint Ministerial Council (Proposed, No session)
XV. Pak- Nigeria Joint Ministerial Council (Estab.1986, Last Session in 2012)
XVI.
Pak- Mozambique Joint Ministerial Council (Estab.1987, No Session)
Pakistani Diaspora in Africa
Country No Of Peoples Country No Of Peoples
Africa 38249 Niger 62
Libya 30000 Mauritius 43South Africa 2500 Morocco 38
Kenya 1868 Algeria 34
Tanzania 950 Djibouti 30
Egypt 700 Senegal 26
Zimbabwe 400 Comoros 11
Nigeria 292 Madagascar 11
Sudan 200 Seychelles 5
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Botswana 160 Others 773
Ghana 152
Potential Scope of Pakistani Products
South Africa has a very minimal size of industry and its economy depends upon imports.
Pakistani exporters can introduce and promote their products by using South Africa as a
gateway.
Halal Products
The countries with Muslims majority are the most obvious target markets for Halal products
especially for meat and meat products. Central Africa have 17 million Muslims including Congo
6m, Chad 5m, Cameroon 3m. North Africa: More than 181 million Muslims including Egypt 71m,
Algeria 33m, Morocco 31m, Sudan 30m, Tunisia 10m & Libya 6m. More than 92 million Muslims
including Ethiopia 37m, Tanzania 19m, Somalia 9m, Kenya 8m, Uganda 4.5m, Mozambique 4m,Malawi 2.5m, Eritrea 2m, Zambia 1.8m, Madagascar 1.2m and other countries.
1South Africa
only 1.2 million Muslims but important market as Muslims are very particular on Halal products
and thus there is a ready market for Halal products. South Africa also serves as a gateway for
the other Sub Sahara African countries. There are many International Halal certification
companies who have their agents and offices working in Pakistan that can test and certify the
Pakistani products as Halal. Since Pakistan is a Muslim country so we have to assume that all
food and beverage, all cosmetics, all toiletries, all medicines & other related products produced
and exported from Pakistan are Halal. It is estimated, 50 million dollars worth Pakistans Halal
products can be exported to Africa.
Rice
Due to lack of interest displayed so far by the Pakistani exporters, competitor countries are
taking share of South African market in rice. South Africa has a good potential of Pakistani rice
and it is very famous among all the communities in South Africa and a large number of
Pakistani, Indians and South African people purchase Basmati rice due to its taste and aroma. If
Pakistani rice exporters focus on South African market aggressively, trade between both the
countries will increase with a significant ratio. Rice Exporter Association of Pakistan (REAP)
should consider it seriously and they can export worth of 100 million dollars more rice to Africa
than the existing one.
Pakistan and Africa has seasonal difference of crops. So, both countries can also take advantage
of this by trading in seasonal vegetables.
1Halal Development Council (HDC) survey
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Textile
Pakistani textiles have already vast market in South Africa. Pakistan is still interested in the
whole range of textile products such as Yarn, Fabric, Upholstery, Made Ups and Garments to be
exported to South Africa. Import duties and other taxes in South Africa are completely local
need based as it is not the signatory of WTO. There is no levy of anti dumping duty on Pakistanitextile products and nor has any other duty been imposed specifically for Pakistan products,
since it is the same for all countries. Pakistan can increase textile export 250 million dollars
more to Africa.
Pharmaceuticals
Beverages and medicines have a very large volume in Africas imports but Pakistans share is
negligible. Today Pakistan has about 400 pharmaceutical manufacturing units including those
operated by 25 multinationals present in the country. Pakistan Pharma Industry boasts of
quality producers and many units are approved by regulatory authorities all over the world.
Pakistan can export worth of 30-50 million dollars Pharma items to Africa Region.
Stationary products
Africa represents a huge market for stationery products including writing instruments, paper
products, envelopes, fax rolls, photocopy paper, markers, staplers, highlighters, sticky tapes,
note pads, drawing instruments and file covers. Demand for stationery products has registered
a two-fold increase among importers in East African countries because of the increase in the
number of educational institutions as well as commercial organizations. Pakistan has a large
stationary industry, so we have to focus on the export of these products also. Currently, Africais importing these products through Dubai and elsewhere in the Gulf. Industries has to take
advantage of the TDAP`s schemes to support branding, opening of offices abroad and the
warehouse for penetrating African market. It is estimated that 50-100 million dollars Pakistans
export of stationary items to Africa can be done.
Tractor
Pakistan is the only country in the world producing the cheapest (Fiat and MF) moderate quality
branded tractors in the range of USD 7000-9000 only1. Pakistani developed tractor parts are in
high demand all around the world, from Europe to America, to Africa and South Asia. It is
estimated that at present average 3000-4000 tractors are exported out of the country every
year. Pakistan can export tractors to Africa in 75-100 million dollars.
Rickshaw/Motorbike
Pakistan is also producing good quality rickshaws and motorbikes. It can be exported to Africa
worth 50-100 million dollars.
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Skilled Labor
Trade relations could be promoted through mutual exchange of delegations of students,
scholars, doctors and businessmen. Pakistan also has a huge number of skilled labors, whose
services can benefit African industries.
Bottlenecks Market uncertainty and high risk of return of payment. There is not a party who can
provide the guide line either the customer is really a customer or someone make fool
the exporter.
Lack of Pakistani bank facility in South Africa for the Pakistani exporters.
Lack of warehousing facility in Republic of South Africa for Pakistani products.
World Bank report has found that the Somali pirates roaming the waters off the Horn of
Africa push global trade costs up by billions of dollars per year and severely affect the
economic activities of neighboring countries. The World Bank defines piracy-affected
countries as Comoros, Djibouti, Kenya, Mozambique, Madagascar, Mauritius, the
Seychelles, Somalia, Tanzania, as well as Yemen, Pakistan and the countries of thePersian Gulf.
The transport and communications infrastructure in Africa is far less developed than in
other regions, which significantly raises the cost of trading, particularly for landlocked
economies.
Beside these problems, the following graph shows the Africas performance over time:
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Recommendations:
Population of Africa consists of one billion persons and a very big market is there. Huge
precious foreign exchange can be earned by exporting Pakistani products to African countries.Africa is a big trade market and Pakistan should enhance trade relations with Africa. It is
strongly recommended the need for formulating African friendly policies for promoting trade
relations with African countries. We can conclude that South Africa is one of the fastest growing
economies in Africa. Since 1994, particularly, the countrys economy has grown rapidly. South
Africa with its peculiar geographical location and booming economy provides tremendous
opportunities for Pakistani exporters to explore this niche market. For this purpose some
recommendations are given below:
Besides government, steps should also be taken for enhancing contacts at private level.
Pakistan had a tremendous potential for South African businessmen but they could not
make any inroads because of unavailability of proper trade related information.
South Africa can boost its exports to Pakistan of items like chemicals, gold, diamonds,
platinum, metals and minerals, machinery and raw material of steel products to
Pakistan. Similarly, Pakistan could increase export of traditional products, like surgical
equipment, rice, and sport goods to South Africa. Pakistan can supply engineering
goods, sanitary goods, machine tools, auto-parts etc to South Africa.
Pakistan Gem and Jewelry Association may be encouraged to create stronger linkages
for establishing Diamond and Precious Stone Cutting Facilities in Pakistan. Efforts should
also be channelized to create the clusters of Gem and Jewelry industry along with SEZ
status.
Government of Pakistan should also provide cost Difference of the increase in shipping
fare due to pirates problem in the African Seas.
National bank of Pakistan May immediately opens its branch in South Africa and should
also consider opening bank branches at important places in the African region.
It should also be noted that African countries have improved their economy by
promoting tourism. Those vast opportunities of tourism are also available in Pakistan.
Mountains, rivers, historical places, deserts and beautiful tourism places exist in the
country but, unfortunately, no attention was paid to the promotion of tourism. We
should benefit from the experiences of African countries. A comprehensive planning
should be made for the promotion of tourism and countrys exports.
Major commodities exported to South Africa include, Textile, and made-up rice, leather,
surgical instruments, sports goods and cement. Over the period of time some other
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products should also start gaining market access in South Africa like marble, ceramics,
steel utensils, light engineering products (electric fans) match boxes etc.
Government should establish new export processing zones like in Sialkot, Gawadar,
Quetta and Multan for facilitating businesses to export goods.
Warehousing and permanent exhibition facilities should be established at identifiedimportant places in the African region.
If strong Pak-Africa trade would be started then this close cooperation between the two
countries would not only be beneficial for two nations, it would benefit the two regions as
well.
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Ports in Africa:
2
2Source: AFDB, 2010.
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Business Opportunities in Africa
For investment point of view South African government and its multi-cultural society to provide
level playing field to the foreign businessmen to initiate and maintain all sorts of businesses on
large or small scale. Many Pakistanis had been investing their entrepreneur skills to add value
to South Africans micro economy. South Africa being considered the gateway to African
continent had turned more lucrative destination to international investors including Pakistani
exporters. After its well-linked road network and railway infrastructure with the neighboring
Southern African Development Countries (SADC), South Africa has been more accessible for
business people to penetrate in African markets. Pakistani business community has to
emphasize Africa besides their traditional export markets in Europe and USA. This is the need to
cement relationships between Pakistani and South African business leaders to develop new
joint ventures.
South Africa FDI Outflow
Year Value
2011 790 R Million
2010 552 R Million
2009 519 R Million
2008 460 R Million
2007 376 R Million
2006 286 R Million
2005 196 R Million
2004 195 R Million2003 162 R Million
2002 170 R Million
2001 176 R Million
2000 207 R Million
0
100
200
300400
500
600
700
800
900
1 2 3 4 5 6 7 8 9 10 11 12
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FDI As Percentage
of GDP
South Africa
2008 3.30%
2009 2.00%
2010 0.30%
2011 1.50%
2012 1.20%
Annual FDI
outflows
South Africa
2008 -3.12009 1.2
2010 -0.1
2011 2.8
2012 4.4
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
1 2 3 4 5
Series1
-4
-2
0
2
4
6
1 2 3 4 5
Series1
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Exhibitions in Africa
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