[Aljazeera] African states should aim for increased continental trade, but more political and economic stability is needed first.
Many
African countries' main exports are raw goods like cocoa and cotton, not
manufactured products [EPA]
Greater African unity has long been
a cherished but elusive goal.
The recently completed 19th African
Union Summit has again given a renewed impetus to establishing closer economic
and political ties among the continent's 54 states, based on a heightened
appreciation of the need for more intra-regional trade. Hence the theme for
this year's summit: "Boosting Intra-African Trade".
The situation is disappointing:
Intra-African trade has remained consistently low compared to its trade with
other continents.
According to the United Nations'
Economic Commission for Africa, more than 80 per cent of Africa's exports are
destined for outside markets, with the European Union and the United States
accounting for more than 50 per cent of this amount. Asia and China in
particular, are also important export markets for African countries.
At the same time, Africa imports
more than 90 per cent of its goods from outside the continent, despite its rich
resource endowments, which provide the potential to supply the continent's own
import needs.
In 2010, just 11 per cent of Africa's total trade took place
among African nations, according to a report published by the Economic
Commission for Africa. This can be attributed partly to the slow implementation
of regional integration agreements designed to eliminate trade barriers.
However, even when tariffs and other
barriers have been dismantled, commerce between African countries has yet to
register any significant increase. Most African countries have continued to
export primary commodities to developed countries and imported finished
products from outside the continent.
If African countries cannot produce
and sell more manufactured goods to their neighbours, no amount of trade
liberalisation will significantly boost the volume of regional trade.
In fact, because these
liberalisation policies open African markets to cheap manufactured goods from
the West, local manufacturers across the continent have been harmed. Hundreds
of firms have gone out of business, further eroding industrial production and leaving
African economies even more dependent on the export of raw materials like
groundnut, cocoa, cotton and others.
The story of manufacturers in the
West African state of the Gambia is the same as in most African countries.
"The dumping of cheap imported goods in the country is ravaging and
virtually killing the local industry," Saja Sambou, an executive member of
the Gambia's manufacturers' association, said.
"We face very intense
competition from Brand B products," he explained, referring to imported
items similar to ones produced in the country. According to Sambou, unless
local manufacturers are protected, intra-African trade "will be difficult
to enhance".
Unfair trade treaties
African leaders and ambassadors have
signed several unfair trade treaty agreements and joint-venture deals on behalf
of their states - and many of these deals are in force for seemingly endless
periods.
It was the understandable
desperation of African nations to fully integrate into the wider world economy
that led them to hastily conclude often one-sided but legally enforceable
treaties with several non-African states and other Western-dominated
"international" bodies, such as the International Monetary Fund, the
World Bank and the World Trade Organisation.
In Africa, legal obligations to
these bodies are often taken more seriously than obligations to integration
schemes within the continent. African nations are indebted to these bodies and
their countless affiliates, causing economic woes at home.
Many have argued that Bretton Woods
bureaucrats wield too much influence on the direction African economies take,
and in most cases the organisations' blueprints have done little to advance
progress in African countries. Furthermore, over the years many of these trade
agreements have done little to increase trade among African countries.
Osman Kargbo, editor of the MarketPlace
Business newspaper in the Gambia, has argued that trade can be boosted in
Africa only when "we have leaders that are politically willing and also
have the economic know-how of intelligibly controlling the micro- and
macroeconomic systems of their countries".
He said the present crop of African
leaders, some of whom might have the know-how to boost trade and real economic
integration within Africa, are not willing to commit themselves to achieve it
because most of them are stooges of Western powers and multinational
organisations, some of which are not dedicated to Africa’s economic liberation
and development.
Can a free trade area make a
difference?
At the end of the 18th AU Summit,
African leaders set a target of establishing a Continental Free Trade Area by
2017.
Although the proposed date for this
may be unrealistic, Africa's economic development will be more difficult to
achieve without a free intra-African economic and trading system. The key to
enhancing intra-African trade is the free movement of people, goods and
services. Currently, in most African countries small-scale manufacturers have
difficulty getting the necessary import or export licences.
Traders are routinely shaken down at
customs posts. Ordinary travellers often have to pay small bribes to get past
police checkpoints.
But Africa's economic integration
cannot be achieved without adequate infrastructure policy, legal,
socio-political and cross-border security frameworks.
Kargbo said the political and
military conflicts that have become the hallmark of Africa do not permit an
environment conducive for all the economic and financial convergence criteria
to merge for the free trade area to exist by 2017.
Africa may need to extract some
wisdom from the European Union and take some lessons from its integration
process. The European Union only became the EU as known today after each of its
members proved capable of meeting some basic economic and political standards.
The Author |
African nations, therefore, need to
strengthen themselves to attain some measure of individual economic and
political stability before the dreams of meaningfully enhancing trade can begin
to materialise.
Lamin Jahateh is a Gambian journalist
and the editor and publisher of Gambia
News Online.
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