THE IMPACT OF INTERNATIONAL TRADE IN ECONOMIC DEVELOPMENT IN AFRICA

THE IMPACT OF INTERNATIONAL TRADE IN ECONOMIC DEVELOPMENT IN AFRICA

 

The principles of dynamics trade policies in Africa  have contributed to the effective development and  economic growth in the African region. In many sub-Saharan African countries,  it goes on to reject the restricted and sterile nature of current trade policy debate between openness and control in the region. The impact of international trade liberalization on the economic development in Africa is tremendous.  Recently,  there was widespread agreement on the relationship between trade liberalization,  growth and development that reflects a broad consensus in the African economy and government. The orientation of foreign investments in the country especially in the exporting sectors is  focused on the local markets.  In the past years, that there were many misallocation of financial resources and weak growth and poor productivity in the African region.  However, these days, international trade in the region has been able to correct all those distortions and misrepresentations of  financial budgets and allocations in the  public business sectors.  At present, there is a wide spread of optimal promotion of right and appropriate allocation of financial resources and investments in the developing countries like Africa. It also revives economic growth and enables the African  economy to play a more competitive role in a global market.

(http://www.uneca.org/atpc/Work%20in%20progress/6.pdf)

Furthermore, the common agreement on the benefits on growth and development of trade liberalization in Africa,  whether direct restrictions by means of quotas and non-tax  barriers, high customs levies and export taxes; or indirect ones such as foreign-exchange policies unfavorable to export activities; have made Africa one of the world’s most closed regions in terms of the global economy. Subsequently, the difference between Africa and the Middle East, the second most restrictive region towards international trade, is greater than that between the Middle East and more open regions such as the Far East regions. The methodological preferences and a series of experimentations in the African economy led to a conclusion that there will be positive international relationships in terms of external openness and growth in the region.  In Africa, the contribution of Rodrik and Rodriguez heightened certain concerns among decision makers on the impact of trade liberalization on Africa. The concerns are based on three trends. First, issue relates to the impact of reforms on the competitiveness of the region’s economies. In this regards, it is clear that trade liberalization has not produced the promised increase in growth rates or improved international integration for Africa. (http://www.uneca.org/atpc/Work%20in%20progress/6.pdf)

On the contrary, the continent has become increasingly marginalized in international trade, with significant fall in its share of world exports, from 4.1 percent to 1.6 percent of global exports between 1980 and 2000. Africa’s imports have also decreased steeply during the same period, from 3.2 percent to 1.3 percent of the world’s overall imports. The marginalization of Africa in world trade has also affected trade in raw materials. The region’s share in world trade in raw materials has fallen sharply, from eight percent in 1980 to 4.4 percent in 2000. Thus, economic reforms and the liberalization of world trade have not led to an improvement in Africa’s international position, and have failed to compensate for the growing marginalization of the continent’s economies. Second, decision makers relates to the consequences of trade liberalization on state revenue.  It must be taken into account that the monetary income of many African countries is closely monitored by the customs revenue agency.  Third, the developed countries are continuously protecting their markets and products, inspire of all commitments made in multilateral agreement among countries.  Foremost, the developed countries have a strong support to their agricultural producers through export funding.  In the case of Africa, where  there is no strong support system coming from the government,  African industries are greatly affected by the state intervention, since a highest tariff and progressive customs practices are mostly prevalent in the labor intensive products which are exported by the developing countries.

(http://poldev.revues.org/78)

 So, while developing countries have implemented major reforms in order to make their economies more open, the issue of access to developed countries’ markets is still a very difficult one. The big question here is when will be that time that transparency and external openness in business tariff will occur in the African countries?  When is the time that the African leaders will focus on the effective strategies to have a just and fair trading regulatory policies that will protect the small businessmen against the big corporations and government officials who are known as corrupt and abusive in nature over the ordinary people.   Nonetheless, the South-East economy is much stronger compared the African countries for more than three decades now.  As a result, South-East Asian countries are more competitive and  integrated into the global economy, moving from export of raw materials to a more dynamic trading that  focused on highly innovative products and services. (http://poldev.revues.org/78)

References:

(http://www.uneca.org/atpc/Work%20in%20progress/6.pdf)

(http://poldev.revues.org/78)

 

 

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