Trade liberalisation undermining Africa's exports

Africa has for the past decade, undergone massive developmental change, through a number of reforms embarked upon to improve living standards. The continent (Africa) has now become a safe haven for doing business, thereby attracting lots of foreign investors, which has resulted in the continent experiencing rapid economic inflows.
Ghana, for three consecutive years, has been ranked by the World Bank and International Finance Consortium (IFC), as the best country to do business in West Africa, and is ranked 87th in the Bank’s overall rankings, in its outlook on “Doing Business 2009,” which was released recently.
Despite all the praises from these international financial bodies, trade liberalisation is said to be undermining Africa’s exports to the outside world.
A 114-page report by the United Nations Conference on Trade and Development (2008), has revealed that trade liberalisation had not improved the continent’s export performance, despite the removal of policy barriers, considered to be the main impediments hampering Africa’s exports.
The report, which examines the performance of Africa’s export after trade liberalization, in order to draw lessons for use in the design of future development strategies, argues that the level and composition of Africa’s exports have largely remained the same.
“Africa has actually lost grounds in world export markets,” noted the report, which was launched in Accra on Monday.
Trade liberalisation, which falls under the Doha Round to globalise world markets, was seriously affecting Africa’s export performance, in the area of capital inflows.
The Doha Round seems dead in its tracks, due to a combination of unwillingness by the rich countries to offer substantial cuts in agricultural supports and markets access, and the reticence of developing nations to offer low enough bindings on their own tariffs.
“Globalisation in some appropriate form, is a major engine of economic growth, but the current “Gung-ho” process of globalisation, has produced paradoxes in both rich and poor countries, and is creating a backlash, requiring a rethink of rules and policies to save globalisation from its cheerleaders,” according to Dani Rodrik, Professor of International Political Economy at Havard’s JFK School of Government.
In a research report by Professor Rodrik, titled “How to save Globalisation from its cheerleaders,” the Professor argued that in the current realities of the world, the pursuit of perfect globalisation and more openness, endangers the present imperfect, but still remarkable globalisation, by intensifying conflicts that the system inevitably generates.
The report concedes that that there had been some improvement, but this falls far short of expectations, and has been relative to the experience of other developing regions.
According to the report, Africa’s share of world exports has dwindled from six (6) percent in 1980, to three (3) in 2007. The report identifies Africa’s weak supply response, as a major factor responsible for the continent’s non-preparedness to take advantage of recent commodity booms.
Africa’s export performance in agriculture, also comes under scrutiny, as well as why Africa has failed to diversify into the manufacturing sector.
To rectify the situation, the report called for Africa to refocus its development priorities on structural transformation, in order to increase the continent’s supply capacity and export response.
An economist, Dr. Nii Moi Thompson, who aided in the launch of the UNCTAD report, noted that African governments had under-invested in Agriculture and services.
This, he attributed to institutional weaknesses, lack of insurance policies to govern the agriculture industry, lack of ready access to roads, and lack of adequate funds for research in the agricultural sector.
Mr. Thompson averred that lack of adequate funds into research, ends up in slow performance, and declines labour productivity in the agriculture sector.
“These are structural problems that we face. We seem to be making money policies in one area, whilst policies in research are sidelined,” he said.
Mr. Thompson, therefore, called for sufficient investment in the field of research, in order to make our scientists useful, to improve productivity on the continent.
He also stressed on the need for market intelligence, and the empowering of the private sector, to boost production on the continent.
To reap the benefits of globalisation, the report recommended the need for Africa to prioritise its productivity, competitiveness, market access, and access to factors of production in agriculture and manufacturing, if the continent wants to make progress.
.