Features

WHY AFRICA IS STILL TREADING WATER

WHEN President Obama was at the White House in the US, I challenged him to try and change the attitude of the US – and its Western allies – to the way they conduct their trade relations with African countries. Of course, I had my tongue in my cheek – no individual, however powerful, can change the world trade system, as we have known it for the better part of a century.

But events have a way of ironically teaching people a lesson, and as President Trump tries to engage with China to obtain trade terms with China that he thinks are fairer to the US than the existing arrangements, I find myself asking, “Oh, so the US does know what unfair trade is?”

When Africans point to unfair trade as the primary cause of the poverty on their continent, they are warned to stop engaging in “the same tired blame-game”. The Atlantic Slave Trade did not have any effect on African economies (our accusers pretend). Nor did (of course) colonialism and the economic system it wrapped around Africa.

There are, indeed, many apologists for slavery and the colonialism that followed it. But deny it as much as they can, these two systems and the legacy they have left HAVE left Africa in the ravaged social and economic condition that it is in at present. The repercussions continue to contribute to and undermine any effort to ameliorate the parlous state the continent is in. Everyone in the world should know about what has been done to Africa, not because Africans want to “blame” anyone, but because without understanding Africa’s past, it is impossible to understand its present.

To fail to relate the true history of the continent, just because someone somewhere might accuse us of engaging in the “same, tired, old blame-game”, would be to acquiesce in being intimidated. But we should allow no-one to intimidate us. If we don’t use our mental capabilities to tell the true story of Africa, our grand-children won’t know the correct narrative, and its effect will afflict them as much it afflicts us.

That is not to say that Africans should do nothing for themselves. From the abstract to the actual, I would like to point readers to an article about cocoa production that appeared in the London Observer on February 24, 2019.[(www. Guardian.co.uk. Search for cocoa, chocolate, Ivory Coast). ). Both the cocoa and coffee markets are plagued by the fact that they are still organised in such a way that the farmers get almost nothing for their hard labour, while the coffee and chocolate manufacturers (and retailers) in the US and other Western countries make a killing out of what we produce. When can we be in the position of China so that we too can bargain for a fair system?

Cocoa and coffee growers and the producers of other raw materials – including timber logs in Ghana – have the same problem. These producers could earn a decent living wage if the tariffs and other rules (enforced steadfastly by the World Trade Organisation and other G8-dominated organisations) that make change – by way of adding value to the commodities before they are exported – difficult, if not impossible.

Strangely, whenever one makes an unanswerable case on behalf of developing countries, regarding the way the current international markets are rigged against them, then, almost by rote, those who approve of the current trade mechanisms trot out the refrain, “Africans must help themselves and not depend on others”. I want to state quite categorically that I neither advocate African dependence on foreign aid, nor do I approve of the theft of money meant for Africa’s development, by corrupt African dictators. What I think, though, is this: if the current arrangements on world trade are not changed, Africa will be “treading water” forever!

This is what an educated Ugandan coffee farmer on the ground says about how the current international world trade arrangements affect African producers like himself. His name is Andrew Rugasira, and he writes: QUOTE: “As an African entrepreneur, I am not looking for handouts that I have not earned. I only want the same opportunities that British entrepreneurs coming to Africa have access to… In the global community, we are all looking for the same things: markets and equal opportunities to exploit them.

He continues: “Many Africans are condemned from birth, to a future of poverty, disease and premature death. In addition to this, the prevailing perception of Africans and their capabilities never transcends the confines of their so-called limitations. You are poor because you are poor. [But] while poverty is an undeniable part of the African reality, it is only part of it… “It is wealth creation that links the African struggle of yesterday, today and tomorrow… Africa’s trade relations with the West are largely determined by the conditionalities linked to multilateral and bilateral aid packages that insist on liberalisation. This means that goods and services from the West can enter African markets with few tariff and non-tariff barriers. This is why the continent remains a viable market business [for the West].

“To underline the importance of trade for African economic growth, we can say with confidence that if African exports were to grow by 1%, this would translate into revenue flows of more than £40bn a year.

“In the face of …. controlled markets, African countries face three problems. First, African manufacturing and processing seldom adds much value to the raw product. Think about this: coffee is the second most traded commodity in the world after petroleum. Of the £35bn the global coffee market represents, [only] £3.8bn accounts for the value of the raw coffee beans traded annually…Second, the industrialised countries’ tariff and non-tariff barriers escalate with each additional stage of processing, for most primary commodities. The vertical integration of transnational corporations means

[that]

producers are usually totally unaware of their product’s true value. Third, monopolistic purchasers tend to impede available market information to check the prevailing market prices, which greatly weakens the bargaining position of the local producers.

“One of the biggest obstacles to Africa’s long-term development in exports is the transnational control over processing. If exports are to lead to greater wealth creation for Africans through economic growth, then these exports must have as much value added as possible, and market access must be improved….

“Let me give you a simple illustration of why we need to use trade and not aid as our principal weapon. One needs approximately five grams of roasted and ground beans to make a cup of coffee that sells for £2. So, one kilogram can make 200 cups, worth £400. Green coffee beans are bought for an average price of 70p per kilogram. In other words, less than 0.2% of the value of processed coffee is retained by the growers.”

Would President Trump accept that if China were to use such a system in its trade relations with the US? I do hope our President, Nana Akufo-Addo (who understands this situation very well indeed) will not tire of bringing it to the attention of every leader from the developed countries whom he meets. Tell them, Nana – they can’t cut off your head!

by CAMERON DUODU

Tags
Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close