ISLAMABAD: Pakistan has significant trade potential with Egypt, South Africa, and Nigeria, which can be expanded by lowering non-tariff barriers, reports WealthPK.
Sajid Ali, Research Associate at Trade Development Authority of Pakistan (TDAP), said while talking to WealthPK that Pakistan has significant trade potential with these three countries, which are contributing more than 70% to Africa’s gross domestic product (GDP).
He added that Pakistan is not achieving its true trade potential because of high non-tariff measures with these countries.
Sajid Ali said that Pakistan’s trade volume was recorded at $2.2 billion in FY22 with these countries, which can be further enhanced.
Data from the State Bank of Pakistan (SBP) shows that Pakistan’s trade volume with Egypt was recorded at $386.16 million, South Africa at $1.7 billion, and Nigeria at $117.411 million in fiscal year 2022.
Sajid said Pakistan’s exports to Nigeria are concentrated mainly in textile and pharmaceutical products. He said products such as cereals, man-made fibres, and tractors have a lot of export potential. He added that diversification from textiles to machinery would help Pakistan to enhance export revenue and increase the trade volume with Nigeria.
In the first month of the current fiscal year (July FY23), exports to Nigeria stood at $1.998 million compared to $2.097 million in July 2021. This shows a decline of 4%, data from the SBP shows. Sajid said South Africa is the largest importer of rice from Pakistan. He said export of par-boiled rice to South Africa is very low owing to a lack of processing units, and high import tariffs on Pakistani products which make it less competitive in the South African market.
Data from the UN COMTRADE database shows that cotton and textile articles are major exported goods to South Africa from Pakistan.
Exports to South Africa reached $15.489 million in July 2022 as compared to $15.312 million in July 2021, showing a slight growth of 1%. Furthermore, on month-over-month (MoM) basis, exports to South Africa declined by 21% to $15.489 million in July 2022 as compared to $19.834 million in June 2022.
The official said surgical instruments, maize, bovine meat, sesamum seeds, polystyrene, and denim products have significant export potential to Egypt. He added that Pakistan’s exports of rice to Egypt are very low compared to India.
Pakistan’s exports to Egypt reached $14.271 million in July 2022, showing a growth of 91% as compared to $7.461 million in July 2021. Exports to Egypt increased by 37% on (MoM) basis, as in June 2022, they were at $10.755 million.
A report of Pakistan Business Council highlighted that Pakistan’s top exports to Egypt face high tariffs ranging from zero to 40%. However, Egypt is granted access to the Pakistani market at relatively lower tariffs ranging from zero to 20%.
According to the report, it is recommended to begin negotiations with Egypt to seek tariff parity in order to increase Pakistan’s exports.
“Apart from ensuring a friendly visa regime for business travellers, a sincere effort must be made to reduce non-tariff measures, and exporters should receive training on the regulations and standards required for exports to African countries,” Sajid said.
