Trade between African countries has declined as a share of the continent’s total trade, despite rising to a record $130.1-billion in 2011, and remains far below levels being achieved in other territories, a new United Nations Conference on Trade and Devel-opment (Unctad) report shows.

The findings, which were presented in Johannesburg by Unctad’s Patrick Osakwe, also indicate that most of the increase in the value of intra-African trade over the past decade has been driven by price rather than volume increases.

In fact, the ‘Economic Development in Africa Report 2013’ shows that, at 11.3% in 2011, intracontinental trade has fallen sharply from the 1997 peak of 22.4%.

It is also paltry when compared with intra-regional trade levels being achieved in other territories.

From 2007 to 2011, the average share of intra-African exports in the continent’s total merchandise exports was 11% compared with figures of 50% in developing Asia, 21% in Latin America and the Caribbean and 70% in Europe.

Unctad argues that there is “enormous potential” to create employment, catalyse investment and foster growth in Africa through stimulating higher levels of intra-regional trade.

It, therefore, endorses the African Union’s renewed political commitment to fast-tracking the establishment of a continental free-trade area, made during the organisation’s January 2012 summit.

“Selling in nearby markets gives firms cost advantages through proximity, potentially reduced transport expenses, better knowledge that allows goods to be fitted to local conditions, and, if sufficient customers can be found, enough critical mass to justify expanding industry.”

However, Unctad also calls for a new approach, describing the old ‘textbook’ and ‘linear’ approach to regional cooperation as inappropriate for the African context.

The report urges the adoption of ‘devel-opmental regionalism’, which would encom-pass cooperation among countries in a broader range of areas than just trade and trade facilita- tion.

In other words, it calls for a model that also includes investment, research and devel- opment, as well as policies aimed at accel-erating regional industrial development and regional infrastructure provision.

“The concurrent development of national and regional industrial policies can stimulate the development of regional industrial value chains in Africa, in turn, offering African countries larger opportunities to trade more goods among themselves.”

Unctad also believes that the private sector will be key to driving regional cooper- ation and should, thus, be encouraged to become more active in regional-integration processes.

The building of the physical economic linkages between African economies, through the creation of ‘development corridors’, is also highlighted as a priority.

“Developmental regionalism goes beyond trade, and encompasses cooperation among African countries in a wide range of areas, including investments in transport and in pro- duction-related infrastructure, as well as in agriculture and industrial projects,” the report asserts.