Intra and extra African Regional Trade Could be the Best Way to Fight Poverty

Intra and extra African Regional Trade Could be the Best Way to Fight Poverty

Elie Smith

There is no point emphasising how trade has helped transformed many societies around the world. If the United Kingdom of Great Britain and Northern Ireland and by extension most of the English-speaking world is more free and richer today, it is because of one thing: trade.

Little wonder, the British who are proponents of freedom and free trade have produced the greatest theorists on the subject. Amongst the many trade specialists or economists that Britain has produced, the famous one who is even regarded as the apostle of modern Economics or trade was or is still Adam Smith. This Scottish man was a visionary and one who took trade to greater limits. In deed, Adam Smith is to Economists and trade, what apostle Paul is to Christians and Christianity. To measure and equally appreciate how futuristic Mr Smith was, back in 1776, he wrote a famous book called: Wealth of the Nations, which is like the New Testament to evangelical Christians today.

But Africa is neither practising trade as it ought to be or she is not sorting out ways to improve the lots of the majority poor of her citizens through the implementation of mechanisms which encourages greater free trade within the continent. What have sadly been noticed recently are recurrent calls for the cancellation of Africa’s debts which also has its merits nonetheless.

On the other hand, the deplorable aspects with the call for debt cancellations are that, it tends to present Africa and Africans as mendicant. In reality, Africans are everything but mendacious as the current campaigns might be presenting the continent and its people. Strangely, supporters of such calls are Institutions such as the World Bank, International Monetary Fund and the United Nations.

While it is true that there are many ways needed and necessary to help Africa out of poverty, encouraging them to default on the payment of their debts is the least acceptable suggestion from all its well wishers. There are also strong doubts on the possibility that, debt cancellation will propel and transform Africa from a largely poor continent as it is today, to a new buoyant and competitive place as noted in an article in titled: Now that the dust has settled, let us look at things honestly (1).

At the same time, while doubting the supposed judicious efficacy of debt cancellation and its hypothetical transformational power, the qualms expressed here does not necessarily means ruling out suggestions made by various groups, organisations and individuals supporting the cancellation of African debts. Nevertheless, it is worthwhile to point out that, debt cancellations won’t work out miracles, hence the obligation to open up plural equations and also have multi faceted approach toward solutions needed to solve Africa’s problems of under development.

First things first

The solution to Africa’s problems of acute poverty and trade imbalances rest squarely in the hands of Africans in the first place. Secondly, the International political and business communities also have to play active honest roles in giving the continent incentives that are susceptible to help the continent to develop. Africa’s own responsibility has to be focused on aspects of trade enhancement within and without existing regional groups on the continent. In factual terms, they should implement and improve on the following:-

-1 in a continent with scanty population, it is imperative for African governments to try to harmonise its investment and taxes and all other codes in order to attract investors

-2 increase greater free movements of people

-3 develop and improve communications within regional and extra regional continental bodies

-4 encourage the rule of law, real democracy, freedom of enterprise and freedom of speech and also promote the respect of individual ownership and property rights on things such as the ownership of land

-5 African governments should also endeavour to source local expertise and goods.

-6 improve on education, health and security.

Hindrances

Weird as it might sound; African governments do waste a lot of monies importing goods and other expertise that could be afforded within the continent. This is due to some myopic programmes and combinations of ancestral, personal and political motives or hatred which are impeding orthodox regional African trades to prosper on the continent. The consequences of these unnecessary squabbles are that many Africans are caught up in abject poverty with little or no hope of coming out.

However, to solve this disgraceful attitude a new programme called NEPAD (2) has been launched. It is praise worthy but odd because, the Lagos plan of Action of 1980 which was equally full with good intentions aimed at improving trade within Africa has never been implemented. Interestingly Trade amongst Africans is not a novelty. Thousand of years ago, intra African trade did prosper but took a nose dive as foreign bodies started entering the continent.

The famous trans-Saharan caravans, linking some parts of West Africa and North Africa or trade which existed between Central, South, and East Africa with the Indian subcontinent and the Middle East are proofs that Africans traded not only amongst themselves but also with others and when it was practised, it made Africans then far richer than they are today.

Today surprisingly, trade even within sub-Saharan countries is very marginal and that between sub-Saharan Africa or what is generally called black Africa with North Africa is almost none existent. This at least officially, for what prospers best in Africa are smuggling bands that are not beneficial to African states but to the ring leaders of those smuggling bands.

The reign of Smuggling

Notwithstanding, ordinary Africans have continued to trade amongst themselves and are prospering, even though not as it would have been the case if it was done legally. For example, people who live along the borders of Northern Mali and Southern Algeria or those living on the west of Algeria and those in Eastern Morocco in North West Africa, have been doing brisk business and are growing richer, at least to those who are controlling the syndicate of smugglers.

Meanwhile in West Africa, there are strong trades going on along the borders of Nigeria and the Republics of Niger and Benin on the North and the West of Nigeria and also on the East with Cameroon and Chad. These positive notes shows that there are what to be traded on in Africa, however, what is lacking are the needed co-ordinations and equally the support of individual governments.

The Dangers of Smuggling

The negative aspects though with smuggling are that, trades are controlled by strong smuggling bands which also means large sum of monies in circulation are out of the control of respective governments, a thing that is dangerous, for it makes those governments vulnerable which could also be one reason of their chronic instability. Another problem with uncoordinated trade or smuggling as widely practised in Africa is that, it denies those governments of internally sourced out funds that would have helped them realise local projects and also reduce no matter how minimal, their over reliance on external financial supports.

Smuggling may enrich some local barons as already noted, but it is inimical to governments where it is being practiced. This is so because, its creates petty local roguish-barons who stall and circumvent state laws by harbouring and funding brigands and terrorists organisations such as the “Salafists” terror groups in Algeria or thuggish bands like those operating in the Nigerian Niger-Delta regions , Area Boys operating in Lagos, Bakassi Boys in Igbo-land to mention just these few.

Roles of Regional organisations

In all the regions in Africa, which ranges from the African Indian ocean islands of Seychelles, Mauritius, the Reunion, Comoros (Mayote a Comoros island controlled by France) and Madagascar, they all have bodies charged with the promotion and development of trade and also the free movement of people. Some of these organisations are even overlapping; sadly nearly all are just talk shops or places to show off.

If not, how is it possible that Senegalese rice farmers can’t sell their produce in Senegal or within the region whereas Nigeria spends billion importing the same product from Asia annually? Where and what is ECOWAS doing? The West African body created to encourage trade within the 16 member state. It is also bizarre that, Peugeot cars and others assembled in Nigeria are abandoned or snubbed by neighbouring countries to import the same brand from Europe.

What role is UMA the North West African regional body playing? When countries within the body fail to trade amongst them or do import goods such as Cocoa, Coffee, Tea, Rubber and Tea from European countries whereas it would have been cheaper to import them directly from fellow African countries such as Cameroon, Ghana, Ivory Coast, Liberia and Kenya. Regional bodies such as CEMAC, ECOWAS, UMA, IOC, IGAD and SADC have not met up with the goals that they were created for and as such, trades amongst African states are inexistent or marginal.

It is also strange that, some of these bodies created to promote trade and regional integrations since 40 years or less for others but have all done little or nothing to promote basic communications such air or telephone to a point that, to travel or communicate by phone from one part of the continent to the other, an African has to still pass through Europe. Hence there is an urgent necessity for an overhaul of the operational mechanics of the existing regional organisations to adapt to the current realities on the continent.

Contrary to what most African governments and others might claim, debts cancellation won’t do the miracles, nevertheless, what would is definitely trades and assistance from developed countries in key areas which could help facilitate trade amongst African countries.

Benefits of intra African trade

For example, farmers in the North, North west and South west provinces of Cameroon, specifically those of Dunga Mantum Division(north west) and Akwaya sub division(South west) who decided to sell their products in neighbouring Nigeria got greater or better profits and were able to send their children to school on time.

In addition, they bought proper clothing, got proper medications and were also able buy electronic appliances such as radios, televisions and also mobile phones. It is the same situation with women farmers and vendors in the Centre and South provinces of Cameroon who have opportunities to sell their farm products in neighbouring countries such as the republics of Congo, Gabon and Equatorial Guinea.

These women have seen their earnings grow, although their earnings like those of their counter parts in the Greater Northern, North west and South west provinces have been punctured regularly by three things: corrupt tax officials who want to reap where they did not sow, prohibitive and multiple tariffs; poor road infrastructure and exorbitant charges from transporters.

Furthermore, these women have been able to sustain their families particularly at a time when most of their husbands are not working due to closure of most factories because of the long economic crisis in Cameroon. These two examples are just to show the transformational power of proper cross border trades amongst African states that unfortunately are being ignored by all stakeholders. Increased and well co-ordinated cross border trades have far higher political positive dividends than any other goodies or handouts. For examples restive parts of eastern Nigeria and western Cameroon will be appeased if there are greater traders between these regions. This is because it will create richest, for hands that are working have occupied minds that does not tolerate sterile bickering.

It is the same thing that would have in Northern Mali and Niger republics if there is increased trade between these countries with Algeria and Libya. In other words, groups such as the Touregs in Mali or Niger or the SCNC in English–speaking region of Cameroon and MOSSOB or MEND in Nigeria that all have justifiable grievances at various levels will have their occasional violent methods to seek solutions to their problems terminated or redirected if greater trade are encouraged within their regions and neighbouring countries.

Where Africa needs help

Therefore instead of seeking ways on how to best cancel African debts, the international communities and also those who really have Africa at heart should do well to sort out better ways of helping shore up intra African trades. They could do this through the financing and supervision of infrastructures such as roods, rails and ports. They could also train costume officials, help establish clearer and simpler investment codes, encourage free speech, build schools and health centres, open up western markets for finished and semi finished farm and industrial products from African countries.

They could also help strengthen all the existing regional organisations and also organised regular meetings amongst these organisations with similar bodies in other parts of the world. These will not only help create wealth but fight poverty and inequalities more efficiently in the world and also stop the emigration of Africans to Western countries particularly to Western Europe.

Industrialised countries stand to gain most because a much more prosperous Africa would facilitate the re-financing of some major industrial sectors such as the automobile and also help solve the problems of rising unemployment and the negative effects of outsourcing that industrialise countries are now facing.

Notes:-

1 read the article by logging on to http://eliesmith.blogspot.com/2006/06/now-that-dust-have-settled-let-us-look.html

Abbreviations:-

2 NEPAD: New Economic partnership for Africa’s Development.

CEMAC: the French abbreviation for Economic Community of Central African states. It was formerly known as the central African custom’s Union also known by its French acronym as UDEAC: The former was proposed on the 16^th of March 1994 in Njamena, the capital of Chad and signed in to law in June 1999 in Malabo capital of Equatorial Guinea by six head of states of the organisation. While the latter that is the ancestor of the current body was created in 1964. CEMAC is made up of Cameroon, Central Africa Republic, Chad, Congo, Gabon and Equatorial Guinea.

ECOWAS: Stands for Economic Community of West African States. It was created in 1975 and has its Secretariat in Abuja, Federal capital of Nigeria. It was formerly made up of 16 countries but one of it founding member Mauritania withdrew in 2002 to join a North West African body called UMA.

UMA: Only known by it French acronym which stand for Union du Maghreb Arab. It was created on the 17^th of February 1989 and is made up of Algeria, Morocco, Tunisia Libya and Mauritania.

IOC: stands for Indian Ocean Commission. Created in 1984 it is made up of the African Indian ocean islands of Comoros, Reunion, Mauritius, Madagascar and the Seychelles.

IGAD: stands for Inter governmental Authority on Development. Created in 1996 it is made up of mainly countries of the horn of African countries of Djibouti, Eritrea, Ethiopia, Kenya, Somalia, Sudan and Uganda.

SADC: stands for southern African development community. Created on the 1st of April 1980 and has its Secretariat in Gaboronne, the capital of Botswana.

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