Upsurge in Exports to Africa

EghtesadOnline: Iran exported a total of 834,381 tons of commodities worth $340 million to African countries during the first three months of the current Iranian year (March 21-June 21), registering a 144% and 350% upsurge in tonnage and value respectively compared with the similar period of last year, according to the director general of Arab and African Affairs Department of the Trade Promotion Organization of Iran.

News ID: ۷۸۶۷۴۵

27 July 2021

“Ghana with $151 million, Algeria with $58 million, South Africa with $32 million, Tanzania with $25 million, Nigeria with $18 million, Soudan with $17 million, Kenya with $14.5 million, Ivory Coast with $12 million, Somalia with $4 million and Egypt with close to $1.5 million were Iran’s top 10 export destinations in the African continent,” Farzad Piltan was also quoted as saying by IRNA.

The official said Ghana, accounting for 44% of Iran’s exports to Africa, was Iran’s 10th biggest export destination worldwide over the three months under review.

“Lifting of some restrictions applied after the outbreak of the Covid-19 pandemic, which made the travel of businesspeople and merchants possible again, and the resumption of commercial events have increased trade with Africa,” Piltan said.

According to Mehdi Mirashrafi, the head of the Islamic Republic of Iran Customs Administration, Iran’s overall Q1 exports, excluding crude oil, reached 30 million tons worth $10.7 billion, which shows a year-on-year growth of 38% and 69% in weight and value respectively.

Iran’s exports to African countries stood at 2.38 million tons worth $578 million in the fiscal 2020-21, registering an 8% and 14% decline in tonnage and value respectively compared with the previous fiscal year, according to the Islamic Republic of Iran Customs Administration.

Ghana with $178 million, Algeria with $123 million, Kenya with $50 million, South Africa with $37 million, Somalia with $26 million, Tanzania with $24 million, Cameroon with $22 million, Mozambique with $19 million, Nigeria with $17 million and Ivory Coast with $11 million worth of imports were Iran's top 10 export destinations in Africa.

Latest data released by IRICA show Iron and non-alloy steel topped the list of Iran’s exports to Africa during the first 10 months of last Iranian year (March 2020-21) with about $100 million. Urea was next with $95.26 million, followed by semi-finished steel products worth $92.07 million, rebar worth $11.92 million and cement worth $11.6 million. Manganese ores and concentrates was the leading imported item from African countries with $9.62 million, which was followed by tobacco worth $6.15 million, seafood (skipjack and stripe-bellied bonito) worth $4.9 million and tea worth $3.95 million.

With 54 countries, Africa is the second largest continent with a population of around 1.3 billion. It has a higher economic growth compared to the world average.

Although it accounts for less than 3% of the annual global trade, the continent offers Iran ample ground for bilateral trade.

Iran’s total non-oil exports stood at 112 million tons worth $34.52 billion in the last fiscal year to March 20.

Intensification and expansion of US sanctions, the coronavirus pandemic and the partial closure of global events and trade relations were the main reasons behind the decrease in Iran-Africa trade in the fiscal 2020-21, ILNA reported.

Problems from both sides are said to blame for the low presence of Iranian export products in African markets.

"From the Iranian side, lack of close communication and knowledge of African markets by the private sector, non-existence of planning and high marketing costs, lack of direct presence in African markets, shortage of infrastructure such as banking relations, transportation, etc. are among the most important problems and obstacles," Piltan has been quoted as saying.

Besides, economic and political instability, lack of proper administrative and security arrangements for long-term economic and trade activities, as well as inadequate financial capacity of the private sector and African governments are among the problems and obstacles from the African side.

The Trade Promotion Organization of Iran is planning to introduce the country’s export capabilities to African traders by using the capacities of the United Nations Economic Commission for Africa as well as Iranian embassies in African countries and other relevant institutions, while creating coordination at the domestic level and pursuing the establishment of trade infrastructure with Africa, such as the development of transportation lines and the establishment of banking relations.

The Trade Promotion Organization of Iran also plans to allocate €200 million to promote exports to African countries.

Piltan says the funding will be part of a $2 billion support package approved by the National Development Fund of Iran (the country's sovereign wealth fund) to promote Iranian exports.

The package is aimed at removing hurdles to expanding foreign trade with African nations, he added.

Earlier, Hamid Zadboum, the TPO chief, had said NDFI’s support would be given to exporters via designated banks over two years.

Money has been deposited with four banks, namely the Export Development Bank of Iran, Cooperative Development Bank, Bank Keshavarzi (special agro lender) and the Venezuela Bi-National Bank, he added.