Larger trade blocs: new avenues of partnership

The announcement this week by trade ministers from COMESA, setting the stage for the establishment of what would become Africa’s largest common market, is truly a measure deserving applause. In fact, the decision comes at a time when African nations need to stand together in the face of increased WTO pressure to embrace the global “free trade” economy.

Yes, there is strength in numbers – isolation is not an option. In fact, one can expect a degree of stability within inter-African returns to the Eastern Province. The worrisome issue of sustaining peace in the region emerges as an urgent task for the present and the future. The endorsement by the COMESA ministers comes at the right time when there is much talk on African integration. Yes, trade should be one of the vehicles towards achieving this goal. At the political level, Africa’s leaders continue to grapple over details such as how to go about establishing a United States of Africa, brooding over positions, structures, dates of establishing the union, and a plethora of other stringent issues that will definitely end in limbo. Leaders continue to be eluded by the fact that trade is the glue that can really bring the continent together.

In a world of nations as well as continents linked by trade, Africa has little to show in regards to inter-Africa trade. All sorts of protectionism and red tape best describe inter-African trade. Over the years we have been fed with prospects of neighboring nations moving towards broader trade relations, the prospects of setting up of free trade zones, joint ventures, and a series of rosy dreams, only to be pre-empted by the too often used explanation, “projects pending such and such discussions.”

One would propose that African nations, or rather businesses, take the initiative and look towards coming up with a new partnership - a partnership among private businesses, a NEPAD of the private sector if you will. The Initiative will commit African businesses to push for broader liberalization, do away with restrictions that inhibit trade, and also help governments develop entrepreneurship. The proposal allows room for governments, but should be limited to the improvement of taxation, greater efficiency in bureaucracies, and more room for higher domestic investment and savings rates.

African businesses can thrive if they are given the required nurturing, but a new partnership between African businesses and governments is also needed.
A number of African leaders have been traveling abroad to press for quicker and deeper debt relief, more development assistance, greater foreign investment, and improved market access for African exports. These efforts are commendable, but there is a need for our leaders to look within their nations in order to develop African industries that can be competitive in global trade. We have all marveled with awe the successes of India in outsourcing jobs from the west, and we have seen the rise of IT professionals in Asia. Why can’t Africa do the same?
We cannot bury our heads in the sand, hoping that the tsunami of global trade unleashed by liberalization will not sweep us away. Due to globalization’s crusading nature, propelled largely by international finance capital, African economies lie in the path of the floods. We need to act decisively if we are to weather the storm, and actions should come by way of political will, bringing about shared vision and partnership based on common benefits. Africa today stands at the threshold of a turn towards its renaissance. This can happen only if we really commit towards broader inclusion in all our activities.


February 22, 2008