International trade refers to all the processes and activities involved in trading goods and services from one country to another. In simple terms, international trade is buying and selling goods and services across borders. However, the motivation for international trade, the mechanisms used to trade international and the impact international trade has on the world are far more complicated. This article will explore why international trade is important and outline why it is essential for Africa.
Why International Trade is important
No country in the world is entirely self-sufficient. Every country in the world engages in international trade to acquire goods they don’t produce or produce inefficiently. Governments encourage exports because exporting a) enables local industries to grow and b) exporting generates valuable foreign currency that exporting countries use to acquire goods which they either cannot produce or produce inefficiently.
Benefits for businesses and consumers
International trade allows businesses to expand their markets and access additional customers. Furthermore, international trade will enable consumers to access goods and services they cannot access domestically or cannot access at the same quality. However, international trade is not a zero-sum game, i.e., there doesn’t have to be a winner and a loser. Both countries can benefit from trade by prioritising the manufacture of products they are the most competitive in producing and importing products they cannot produce efficiently.
Why is International Trade important for Africa
To truly understand why international trade, regional trade and particularly more exports leaving the African continent are essential, you need to know where Africa’s current trade performance stands. Experts estimate that although Africa has a tremendous amount of resources, strong agriculture competitiveness and vast areas of arable land, Africa’s share of world trade stands as low as 2%. However, suppose Africa was able to boost its trade performance by just 1%. That percentage increase could earn an estimated $70 billion in additional income for Africa. $70 billion is nearly three times Africa’s total development assistance from the world. As I am sure you can see, Africa does not need more aid; it needs more trade.
We believe Africa has the competitive products and persistent entrepreneurs needed to increase the continent’s participation in international trade. However, we understand that the global market is a complex and ever-changing landscape. Thus, TFSA, in collaboration with the International Trade Institute of Southern Africa, has created the TFSA School of Export. The TFSA School of Export provides on-demand training and insights on various topics related to international trade. Furthermore, we are dedicated to boosting Africa’s participation in international trade and are continuously refining our offering to achieve growth on the African continent. Click the link below, join our community, and let’s grow Africa together!
To sign up to the School of Export CLICK HERE.
If you already have a profile, CLICK HERE to login to begin the module.