There is huge potential for intraregional trade in Africa, but a lack of infrastructure is holding the continent back, American Chamber of Commerce (AmCham) president and Ford Motor Company of Southern Africa president and CEO Jeff Nemeth said on Wednesday.

Speaking at an event held by AmCham in collaboration with Coca-Cola, in Johannesburg, Nemeth pointed out that in 2011, economies in sub-Saharan Africa exported a mere 12% of their outputs to their African neighbours, while economies in South East Asia, North America and Europe saw 25%, 49% and 65% intraregional trade respectively. 

“Africa is the world’s most fragmented economy, which makes regional integration an important opportunity to boost competitiveness,” he added.

Nemeth said that infrastructure investments were key to promoting a larger Africa-wide market capable of attracting significant investment, adding that there was an opportunity for US companies to play a role in infrastructure development.

Speaking as part of a panel at the event, Citi South Africa country officer and MD Donna Oosthuyse stressed that infrastructure reached further than ports, roads and energy.

“For us in the financial services and for many companies, infrastructure also relates to legal and institutional aspects such as organised exchanges and electronic clearing houses,” she said, adding that the continent’s infrastructure challenges should be seen as an opportunity.

Meanwhile, Nemeth stated that business had to work together to leverage the benefits of engagement to further the agenda of a free market and trading access.

One of the key engagements between the US and Africa takes place through the African Growth and Opportunity Act (Agoa) trade arrangement, which provides beneficiary countries in sub-Saharan Africa with the most liberal access to the US economy available to any country without a country-to-country free-trade arrangement.

“South Africa is outspoken in its desire to see Agoa renewed with the same characteristics enjoyed today. AmCham supports the renewal of Agoa, but would like to leverage access given to the US market to better position US companies, and give them access to the continent,” Nemeth said. 

Further, Department of Trade and Industry chief director of Africa bilateral economic relations Lerato Mataboge said that government was set on building strong bilateral relations.

“We take our role as the enabler of growth seriously and, therefore, have to make sure that the regulatory environment on the continent is sound. We are keen on driving the process of industrialisation on the continent so that we can unlock value chains and reach our potential,” she said.

With regard to the Tripartite Free Trade Area, which aims to combine the markets of 26 African countries, Mataboge stated that considerable progress had been made this year, with a development and integration approach having been agreed upon.

The approach rested on three pillars: actual market integration, infrastructure development and the industrial development of value chains.

“We have agreed on this approach because we realised that as much as we will be discussing the reduction of tariffs for certain products, the countries still needed to be able to move the products among themselves. We need to make sure that we have cross-border infrastructure links and not only open markets,” she said.