Africa Cannot Compete

There has been a lot of “noise” about Aid for Trade, preferential treatment and special “access to markets” schemes by developed countries and international organizations simply to help African countries benefit economically from trade. Initiatives such as the African Growth and Opportunity Act (AGOA) have been born and to some extent have helped developing countries of Africa. But I don’t think that is the solution to increasing Africa’s contribution to world trade. I don’t think that these initiatives are tackling the root causes of our poor contribution. Let me outline just 3 problems I think are very fundamental.

1. Transport costs in Africa are twice as high as the world average.
2. Corrupt customs officials and outdated, long and burdensome customs procedures
3. Delays at border crossing points.

Problems such as these erode the economic benefits that Africa gains from preferential treatment offered by developed countries. Over the past few years developed countries have reduced their import tariffs simply to help African countries have access to their markets. But prices of African exports are still high because of other costs added by non – tariff barriers. Because of these non – tariff barriers, Africa cannot compete on the global market. The continent has been marginalized and left voiceless in international trade negotiations because of her inability to integrate herself in the world economy.

I don’t think Africa will be able to increase its share in global trade if these fundamental problems are not identified and solved. No amount of preferential treatment or AGOA will increase our 3% contribution. No amount of WorldBank or United Nations can solve it either. The solution must be born from Africa, the solution must be African. How can Africa reduce its high transportation costs? How can Africa modernize customs operations and improve port efficiency? How can Africa help its numerous Small and Medium Scale Enterprises (SME’S) access wider markets and produce cost efficiently? These are the questions we should be asking if we want to benefit economically from trade.