W.T.O: Africa Must Take a Leave of Absence

By James Shikwati

It is a high time Africa resorted to an alternative plan. The World Trade Organization has tossed African countries from one issue to the next without leading to any significant gains. Initially, African countries and other poor countries literally begged for medicine for their sick under the stringent measure adopted under the TRIPS (Trade Related aspects of Intellectual Property Rights). Then came the procurement issues, but simmering in the underbelly of negotiations was market access of African products to the rich nations' markets. Wealthy nations on the other hand have their eyes fixed on having Africa liberalize their industrial and services sectors.

During the recent plebiscite in Kenya, a prominent nominated Member of Parliament opted not to join the mammoth campaign rallies but rather stealthily build her grass root support. When asked why she took such an approach, she argued that it would make little sense to be in a victorious camp when one had no bargaining power. What lesson can Africa learn from this?

African nations must seek to broaden their internal market base by opening up to each other. Unless the continent builds its own grass root trading system, pushing for each individual 54 nations to meet W.T.O. standards will change little in bargaining power. A country such as Namibia with a market of 1.9million consumers, or Burundi with 7 million people for instance, is expected to negotiate with countries such as the U.S.A (295 million people) or China (1.3 billion people). Instead of Africa seeking to consolidate her fragmented market, each country is seeking to play out its own game.

As Africans head to Hong Kong, it is very clear that the World Trade Organization agenda implicitly pushes African strategists to focus more on external markets as opposed to addressing the continental shortcomings. The continent lacks a uniform and standardized business procedure making it difficult for any entrepreneur to tap into the market of 800 million consumers. Exaggerated nationalism in the continent exposes millions to starvation as each country raises agricultural barriers against its neighbors. Travel restrictions and visa delays make it difficult for African business people to invest locally. Unpredictable rule of law, in most cases controlled by the political elite, compromises the ability of Africans to be productive.

The people negotiating at the W.T.O are government officials keen to protect their own industries while 'persuading’ others to lift their barriers. This kind of framework cannot lead to a World free trade area. With Africa contributing only 2% to the global trade arena, the best option would be for the continent to opt out and push for unilateral trade agreements while investing more time in inward reorganization.

Take East African countries for example: with an estimated population of 100 million people; negotiators will be joining their West African counterparts on the cotton subsidy debate when it would be in their best interest to specialize in other products. Because each African country seems to produce similar products, it is easier for wealthy nations to split their joint negotiating attempts. Moreover, the recent debt relief and more aid pledges to Africa place any sober negotiator from Africa in a tight fix. You cannot play hardball with one who feeds you! The East African nations go to Hong Kong in bad shape; they are facing political upheavals. Kenya is yet to emerge from a devastating government defeat in a constitutional referendum, Tanzania is bracing itself for an election, and Uganda is driving in reverse towards the dictatorship of the 80's. All these events may jeopardize their effectiveness in trade negotiations.

The key priority in Africa must be to address the consumption problem facing the continent. With a population of 800 million people, the continent has not been able to address the needs of its huge market in terms of medicine and agricultural products among others, leading to high incidences of disease and malnutrition. What individual African countries have done is to impose against each other an average of 33.6% tariffs on agricultural products, while lowering tariffs for Europe which is hit by only 12.7% and East Asia b an average of 19%.

To address the consumption problem in Africa, it will be strategic for the continent to get out of the World Trade body and take time to re-examine its policies. Western and Northern African states are headed to Hong Kong with one key demand in mind: to negotiate the rich nations out of subsidizing their cotton sector. For African governments to set their global trade agenda effectively, they ought to abolish all trade barriers within Africa, get Africans producing without hindrance and then go to the negotiating table.

The present set up at the W.T.O. leads to each individual African state playing against its neighbor on goods they would otherwise not have produced. It does not make good economic sense to have rich nations allowing market access to each tiny African nation that produces cotton for this will make the intra African barriers even higher. Africa must learn the rules of the game. It is in Africa's own interests that she must invest in creating a sound business environment within Africa in order to increase her competitiveness. Africa must ask for a leave of absence from the W.T.O!

James Shikwati
Director IREN
CEO The African Executive
Nyaku House, Mezzanine Floor
Argwings Kodhek Road, Hurlingham
P.O.Box 135 00100 Nairobi Kenya
Tel: 020 273 1497
Fax: 020 272 3258
Websites: www.irenkenya.com
www.africanexecutive.com
 

UG to confer degrees on CJ, Ibn Chambas and others

Accra, July 30, Ghanadot/GNA - The University of Ghana on Wednesday announced it would confer honorary degrees on some distinguished personalities, including Chief Justice Georgina Wood and Dr. Mohamed Ibn Chambas, President of the ECOWAS Commission....More

Surveyors asked to put services at municipalities and assemblies’ disposal

Accra, Aug 1, Ghanadot/GNA-This year’s Annual Land Surveyors’ Seminar organized by the Land Surveying Division of the Ghana Institution of Surveyors (GhIS) has taken place in Accra, with a call on members to endeavour to put their services...More