by Murithi Mutiga
Every two or three years, African heads of state travel to a foreign capital to be wooed by one or another of the major powers jockeying for position on the continent. China has been among the more prominent organizers of these “Africa summits,” while Japan, India, Turkey, Brazil and the European Union have all held their own versions. In August, President Obama will join the fray when he invites 47 African leaders to talks on trade and security in Washington.
These forums have their merits: They reflect the rising importance of a continent that is home to six of the world’s fastest-growing economies and can provide a platform for the discussion of development plans that can benefit everyone concerned. But to a certain extent they have more to do with geopolitics — U.S.-China rivalries for example — rather than global trade.
The problem is that they reinforce the image of a continent badly in need of foreign aid to resolve its problems. The truth is that greater cooperation among African states is the most promising route to transforming the continent’s economic fortunes.
There is hardly any place that has less interregional trade than Africa. Whereas 68 percent of commerce in Western Europe in the last decade was with other West European nations, and 48 percent within North America is between the United States, Canada and Mexico, interregional trade in all of Africa stands at between 10 and 13 percent.
The problems that hobble business in Africa are mostly man-made. Artificial barriers such as high tariffs, inefficient transportation and reluctance to facilitate the free movement of people and goods within regional economic blocs are among the biggest factors. With some exceptions, such as the conflict-ridden South Sudan and the Central African Republic, Sub-Saharan Africa is booming. But more interregional commerce would bring even greater results.
In an excellent, but underreported policy paper published in January 2012, the African Union Commission and the United Nations Economic Commission for Africa outlined a road map whose implementation they projected would see intra-African trade rise to 25 percent within a decade. The central idea — establishing a pan-African free trade area — would bring an end to tariffs and import quotas, and create a market worth as much as $2.6 trillion, according to the president of South Africa, Jacob Zuma.
SOURCE: The New York Times