Tuesday, 8 July 2014

The Bogeymen of intra-African Trade

Irrespective of the quantum of goods and services that cross borders within Africa, trade will continually remain a growth mechanism. It creates jobs, reduces poverty, and in the case of Africa, represents the champion who will harness any integration agenda being pursued. Issues on intra-African trade seems to emerge on the docket of every major regional summit, with leaders devoting time and effort to unearth dead-on boulevards around the demurrers of a robust intra-African trade. The economic benefits of trading (some stated earlier) is common knowledge these days; export gains, specialisation and importing resources that are exclusive to other regions … so with all these glaring benefits, one must be wondering what the bogeymen of a wholesome intra-African trade are, because statistics disinter the continent's trade frailties.

 African leaders sign agreements. Negotiations on free trade agreements roll more than a casino dice but with cronyism being a canker in African politics, true-blue growth in the private sector (the driving force of production and growth) seems to be at the unfavourable end of policies made by governments to favour only their hobnobbers. Leaders are not creating a level playing ground for the players in the private sector to ensure that enough is being produced for their domestic markets respectively, in order to create surpluses for exports. Leaders may be promoting intra-African trade on paper, but their running policies at home are some of the bogeymen. Also Political changeovers, whether through democratic or undemocratic means, are bogeys who hunt and hurt this much needed cooperation in Africa.

Starting a business is one of the most challenging ventures in Africa. Getting documentations and certifications can last ridiculous periods and one would have to probably bribe his/her way through the process to get prompt feedbacks. Then after the hectic process of establishing a venture, local companies will have to compete with multinational companies who almost monopolise both local and international markets. Local production figures then stall and encouraging export figures become scarcer than a mouse in a broad day light. It is good to encourage foreign investments in every developing economy, but if that will stall the growth of local industries, then this does not only hurt local growth but also becomes a bogeyman to intra-African trade. Local companies must be the priorities, they need to be on top, like the apex of the great pyramid of Giza.

The necessary logistics African countries need to facilitate trading is a massive challenge and a bogeyman. A bad carpenter will always produce substandard furniture, irrespective of the carpentry logistics at his disposal, but will it be fair to call the carpenter exposed to substandard logistics who equally produces substandard furniture bad? It is impossible for intra-African trade to be lucrative if transportation is expensive, if power for production is not constant, if there are few rails which crosses borders, if there are substandard ports and harbours … if we cannot make trade physically possible. Free trade agreements can be signed, trade barriers may be eliminated, but an infrastructural deficit will make trade in Africa a fictitious phenomenon hunted by a physical bogeyman. An encouraging oil and gas pipeline alone is not enough.

The importance of the elimination of trade barriers cannot be overemphasised though. Clearance procedures need serious revision as well as costs and delays. This is when technology has to be fused into clearing processes and automated procedures. Record keeping in Africa sometimes comes under massive criticisms, and even thought things are improving, collectively, more needs to be done. Governments will have to reduce port and harbour charges and tariffs (if an outright elimination will be fateful), but must ensure they are doing so to ensure a much higher contribution to GDP. The bogeymen who make up trade barriers are not difficult to eliminate, relative to the others. The only challenge must be the ability to strategize, prioritize and continually ensure that when those that government can directly regulate goes away, the pseudo ones do not takeover.

The time is now, Africa has waited long enough. Trade figures must rise, and the bogeymen, imaginary or real, must be thrown overboard to make way for more goodies on the trade vessels of Africa.

1 comment:

  1. Very good analysis of the barriers to effective intra-african trade. Our unequal relationship with European, American and Asian powers is also a barrier.


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