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Trade Malpractices: The Bane of Africa

By Mac-edwin Obi (Nigeria)


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    A few years ago, the West African nation of Mali received US$37.7mn in aid from the West. This would have been good news if it ended that way. But, in the same year, the same Mali lost US $43mn to western businesses due to unequal trading opportunities (BBC Focus on Africa: Jan.-Mar.2007;Ngugi`s article).The nation’s exports, mainly agricultural commodities, fetched next to nothing near their market value because of subsidies given to farmers in the West and the trammeled access to lucrative European and American markets.
    The scenario above is even worse when seen from a continental angle. The US, the world’s biggest economy, gives aid to African nations. This is a welcome development when one realises that a huge gap exists between the US and Africa .But the aid thing is becoming a gift with the right hand and taking it back (even more than gift)with the left. How else can one explain a situation where America closes part of its market to African exports? Apart from crude oil, which it desperately needs, no manufactured or agricultural commodity from Africa is `good enough` for the American market. The few items that get in are dropped out of the market by high tariffs. As if there are not enough subsidies received by the farmers there (the West), it makes these African commodities stand no chance in arguably world’s most profitable market!
    The oft-mentioned aid to Africa is disproportionate when juxtaposed with what the US in particular allots to other institutions and regions. For instance, the US spent about US$260bn on military equipment last year. Israel, a nation of about 10 million, receives annual aid of about US$3bn.What does the whole of Africa, of 690 million population, get on the average yearly? A Paltry US$4bn! These are just instances of marginalisation that the third world, particularly Africa, suffers in the hands of the West.
    How then do these malpractices affect Africa adversely? The most obvious effect of these malpractices is that African commodity producers, particularly farmers, have remained very poor. In Nigeria, agriculture contributes about 41% of Nigeria’s GDP (Africa Report; April-May 2008). Also 70% of Nigerians are directly or indirectly employed by agriculture .Since a quarter of all Africans are Nigerians, these trade imbalances make the labour of many Africans to be poorly remunerated, thereby making these farmers slide further into penury!
    Another impact of marginalisation on Africa is the ever-widening yawning gap between us and the West. They are already rich and when they add this to the illicit gains of unfair trade, they have more than enough to not only provide infrastructures for their people. They provide social security for their citizens. Of course, these developed nations, mostly in the West, become too attractive for Africans. The result? Young professionals who were trained with hard-earned resources of African governments `abscond` to the western nations for better opportunities .They leave in their wake failed states infrastructurally and cross over to the developed world to develop it further. And the gap widens! I was shocked when I heard on a BBC programme that a West African nation had only one qualified psychiatrist. Where are the others the nation trained over the years? About sixty percent of Ghanaian medical doctors emigrate to Europe, particularly England, within five years of passing out.
    The picture painted above is even better when compared to the next scenario. It is about the vices that result from migration from Africa to the West. When, for one reason or the other, Africans (mainly young adults) fail to meet the minimum requirement for travel abroad, they resort to forging documents or taking illegal routes to get to the `dream world`. And when they get there? Crime! Crime in different forms - organised crime (syndicates), trafficking in persons (mainly young females for prostitution), child labour and abuse, drug peddling, etc. No wealth made from such ventures is beneficial to whoever makes it. It’s either the person dies in the process or finds himself on the wrong side of the law. In the end, Africans suffer and our name is further tarnished.
    The unbalanced trade between the two blocs is threatening the independence of African states. Even the issue of expecting aid from the West is a form of (re)colonisation! When the developed nations of the West deny Africans the full fruits of their labour and pretend to make a redress with aids that are not even commensurate, Africans are, without realising it, going through another round of colonisation. Most nations in Africa have up to half of their annual fiscal budget revenue from aid .thus making many parts of Africa ‘banana republics’ who cannot survive without the West, Call it modern day slavery. Wars and fierce political battles were fought to free Africa from the colonisation of the late 19th century to the early 20th century. If we are not careful, even a World War III will not free us from the economic colonisation Africa may endure in the future.
    There are also drops in revenue of African governments as a result of the trade imbalance. In most parts of Africa, nay the world, tax is per income. Therefore, if African farmers don’t get the full worth of their produce, they pay lower taxes and there is a drop in government funds. When government receives less than what they should or expect to get, they cannot perform all projects their people expect from them and the result is the kind of militancy we have in the Niger Delta today. Most of the wars in Africa have one link or the other to the feeling of inadequate attention from government. These governments sometimes have their hands tied by unfavourable trading relationships with the West. The Charles Taylor-led rebellion in Liberia, which started in 1989, is alleged to have started because people from his (Taylor`s) area felt they were marginalised by the Doe government. And when the war spread to Sierra Leone, the illegal sale of diamonds fuelled the war. Businesses in the West were buying these stones, even with the UN ban.
    The most vicious of the negative effects of the trade imbalance is that it negates the law of natural justice. Whenever a person cheats another, more so to the point when it causes poverty, it is very wrong and must be condemned. No religion in the world supports injustice. The US prides itself as the bastion of freedom. For this reason, trade imbalance, if thoroughly studied, is worse than armed robbery!
    The way out? The onus is on African government officials to use the very powerful World Trade Organisation machinery to address these imbalances. Almost all African nations belong to this body and by concerted efforts, they can COMPEL the western nations to see reason with them and make trade, particularly in agricultural commodities. The present situation, where cotton or cocoa is produced in Ivory Coast and the prices of the produce are regulated from, must stop. Market dynamics (demand and supply) should control of prices.
    The common Agricultural Policy of European nations should be reviewed. The subsidies given to farmers under this scheme should stop. And, if the Europeans do not know what to do with their money, they should channel it into checking global warming whose consequences Africa suffers innocently. The US should reduce the tariffs paid on goods coming from outside as they won’t be a world power if other nations slammed such tariffs on its (the US’s) exports. The African Growth and Opportunity Act  (AGOA) is quite laudable, but it’s on a very low scale to make meaningful impact on Africa. It needs immediate expansion. On the part of African governments, there is need now, more than ever, to diversify Africa’s exports to include more services like outsourcing, software engineering, etc. so that the impact of trade inequality will not be that adverse as they are more on agricultural produce. India is growing, thanks mainly to ICT, and Africa can grow that way too.
    Orientation is key in every problem involving human beings as nothing can be achieved unless people decide to do things properly. The biggest challenge with regards to orientation is corruption on the part of both the government and the people. But that of the government is more adverse as it has greater influence on the people and when the government is not sincere, many more go wrong in the society. There must be sincerity of purpose by the government officials. They must sacrifice personal interest when negotiating for fairer trade.


:BBC Focus on Africa; January-March 2007
Africa Report: April-May 2008
Africa Have Your Say: BBC World Service (2007)