Africa in the World Economy

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Said El Mansour Cherkaoui ★ Africa ★ Afrique

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Africa Stands for Your Trade Right

African leaders suddenly became believers in the benefits of international trade liberalism, which are struggling to counter and fall back on the African continent. Africa has 43 members out of the 162 members of the World Trade Organization, and African countries represent more than a quarter of the actors in this institution. The WTO is moribund and was neutralized by the current and overlapping regional free trade agreements and especially by the fact that no agreement of universal scope has been concluded since 1995, when the Organization was created.

The arrival of Donald Trump in the White House and his tendency to the protectionist rally and the dismantling and renegotiation of all previous agreements only add fuel to the fire of his commentary on the WTO, which he described as a “disaster” .Face the protectionism of the current administration of Washington, African leaders continue to nourish a dedication to the regionalism for liberalism that is coupled with a return to the fold. to African decision-makers to identify in free trade a mechanism which should make it possible to intensify exchanges between African countries and strengthen the integration of Africa

Africa has not yet emerged from the mill because at the level of global trading system, Africa continues to be reduced to a mere statistical indicator: less than 2 percent of world trade.

TRANSPORTATION LOGISTICS AND INTRA-COMMERCE IN AFRICA

Despite the modernization of the logistics sector in Africa, the transportation network and operations remains insufficiently competitive, costly and under-equipped to support African growth and meet the needs of investors and entrepreneurs. Bringing a container from Abidjan to Ouagadougou costs about $ 5,000, while the transportation of container from Shanghai to the Ivorian economic capital costs $2000…

Railroad and Africa Road to Integration

Africa’s inability to take advantage of its openness to the international trade is explained by the fact that it integrates into world trade from a position of little value and low value added and wealth. Its status is that of a supplier of commodities and raw materials in very limited numbers, which limits it to the bottom of global value chains.
Moreover, because of the early liberalization policies that African countries have experienced in the past, their efforts to industrialize, recover and process raw materials and diversify have been thwarted, or destroyed, by the sudden and brutal competition of imported products.
The reduction of their political space and the loss of sovereignty and control over their own economic and trade policy instruments born in this period still continue to cripple many countries.
The lack of railroad connecting regions in Africa and even the regions of the interiors between their cities have also neutralize the expansion of local and regional market as well as the regional economic integration within each African country.
This is crucial lack of infrastructure that respond to the regional development has also created discrepancies between the decisions of the Central authorities to pursue an international integration while the regions remained enclaves in their own territories
The train had in all the world’s economies a logistic value addition that is concentrated first in the movement of goods and manufactures and other natural primary resources. This transfer function between the various metropolitan areas and cities was and continues to be the first and most profitable macroeconomic operation that has effects and impacts on the entire economic fabric and the growth of the circulation of value and its multiplication under the effects of market expansion and corresponding demand.
Economic and structural integration is developed with productive and operational complementarity both in terms of services and finished products or equipment and other consumables.
The train serves as a transmission belt between the various and complementary niches and the different Hubs as well as the major sectors that support growth and the creation of added value and high added value. This allocation can thus contribute to the financing and launch of new technologies for the transport and transformation of traffic circuits and the distribution of innovative goods.

With 1.06+ billion inhabitants and average GDP growth rate of 2.4% per annum, most Sub-Saharan African Countries rely on import to supply processed & packaged food including dairy Products. Total import of Agricultural products (food included) exceeded U$50 billion in 2018 of which near 6% pertaining to dairy products and about 9% pertaining to diverse packaged food. The demand for packaged food products experienced an average growth rate of 3.4% within 2014-2018. However, countries like Bostwana , Ghana , Zambia, Gabon, Namibia , Congo and Equatorial Guinea recorded higher than average.

According to the recent announcement by the African Development Bank (AfDB), the total import of Food & Agricultural products expected to increase by 2.2 times within the next decade. Therefore, the total import of agricultural products (food included) expected to reach U$110B by the end of 2028. China, India, USA, Spain and Netherland are among the top exporter of food products to the region.

Africa Tech Move: Social Cost or Cost Opportunity

In Africa, some people have been abandoned along the way in recent years as technology and robotization have reduced the wages of some communities “of workers, says Christine Lagarde, the director general of the IMF.

What must be placed the trade deficit of Morocco for the year 2017 in this explanation. This deficit of Morocco’s trade balance widened by 2.6%, according to the latest statistics provided by the Office des Changes, Tuesday, January 16th.

The difference between the country’s exports and its imports thus amounts to 189.8 billion dirhams (16.7 billion euros), against 185 billion dirhams the previous year. This is the second consecutive year that the trade deficit is increasing. Morocco finds in Sub-Saharan Africa the counterweight to the imbalances crossed by Western economies. To protect itself, we are witnessing the break-up and the questioning of trade agreements, Brexit, draft Trans-Pacific Regional Agreement (TPP), Alena (Nafta) and the Transatlantic Partnership (TTIP or Tafta).

At the same time, Western chancelleries opt for the establishment of a foreign policy based on their protectionist armada such as the administrative barriers of “quota,” measures to stop migratory flows and that as decisions imposed by their unstable situation. These delusions had all weakened or reduced the growth of trade both with Morocco and the rest of Africa, giving an impetus to the regionalization of trade and the search for markets through a host of agreements of association, integration and A fiercer competition had thus infiltrated the commercial exchanges whose globalization had welded the links of its international chain.

Africa must thus return to its own local, regional and peripheral resources and potentialities through the strengthening of the rapprochement between its economic components, namely the Regional Economic Communities and the bilateral commercial, financial and cultural exchange agreements and in this case of Harmonization of the Digital Economy with national economy.

Free Trade, Entrepreneurial Education, Digital and Knowledge Economy in Africa

It is through the establishment of a digital economy that foreign trade officials and international financial relations can have access to reliable data and closer management of flows and their cyclical changes. The corresponding data can facilitate decision-making like any sectorial intervention without calling into question the commitments made to the rest of Africa and the world with which Morocco has cultural and commercial exchange treaties.

African leaders signed on Wednesday, March 23, 2018 three major economic agreements during the extraordinary session of the Heads of State and Government of the African Union (AU) in Kigali, creating a Continental Free Trade Area (Zlec ), seen as essential to Africa’s economic development, through increased intra-African trade.

Some 44 countries signed the agreement establishing the African Continental Free Trade Area, while 43 heads of state signed the Kigali Declaration for the launch of Zlec and 27 signed protocols relating to the free movement of people, right of residence and right of establishment.

Zlec gives birth to the largest free trade area in the world since the World Trade Organization was established in 1995. Nineteen Presidents were present while a number of Prime Ministers and government also signed for their respective countries.

The heavyweights, like Morocco, Egypt, Kenya and yet very protectionist Algeria, signed the agreement, which will come into force within 180 days, after being ratified by the signatory countries.

Egypt and North Western Africa by Said El Mansour Cherkaoui

“Some countries have reservations and have not yet finalized their consultations at the national level, but we will have another summit in Mauritania in July and we hope that these countries will then sign,” said the commissioner. Minister for Trade and Industry, Albert Muchanga.

Eleven countries out of the fifty-four countries of the AU still miss the call including Nigeria whose President Muhammadu Buhari decided not to move to Kigali, after one of the largest trade unions in the country. Nigeria Labor Congress (NLC) expressed concern about the negative effects of Zlec on the national economy.

The union had also asked to be more involved in the negotiations and Buhari had agreed to “give more time for consultations”.

Nigeria was one of the continent’s leading economies, which coordinated the negotiations with Egypt. Other countries that have not signed the agreement include South Africa, Benin, countries seeking taxes, particularly on products transiting through their ports or roads, including Eritrea, Namibia and Sierra Leone.

Zlec must allow the gradual elimination of tariffs between member countries, thus promoting trade within the continent and allowing African countries to emancipate themselves from an economic system too focused on the exploitation of raw materials. The AU estimates that the implementation of Zlec will increase the level of intra-African trade by almost 60% by 2022. Currently, only 16% of Africa’s trade is with other countries in the continent.

If the 55 AU member countries sign the document, the Zlec will open access to a market of 1.2 billion people, for a cumulative GDP of over $ 2.5 trillion. Its advocates believe that it will help diversify African economies and the continent’s industrialization, while offering it a unique platform to negotiate better trade deals with the outside world.

La Zlec is one of the key projects highlighted by the AU in its Agenda 2063, a long-term development program that aims to facilitate the flow of goods and people across the continent. At its last summit, in January in Addis Ababa, the AU announced the creation of a single and liberalized air transport market, including 23 countries of the continent

Under the theme: “Creating an African Market”, the initiative falls under the Agenda 2063 of the U.A. According to estimates, if all 55 AU member states ratify it, the agreement will bring together 1.2 billion people with a combined gross domestic product (GDP) of over 2 billion US dollars.

In parallel, at the American Institute of Entrepreneurship in Africa, we are proposing the creation of a Common African Market for Education (MACEA) to harmonize this impetus for trade integration and transfer of values across Africa’s borders. Similarly, it is in digital education that Morocco can explore the infra-structural, logistical and technological resources to draw and establish the digital foundations for strengthening its position as a partner-competitor in its attempts to integrate both in the international, African market only for its candidacy for the Restricted and Reserve Quatro Club of the Emerging Countries of the BRICS Carré.

The Reality of the Darkside of African Plight

To fly North from Bangui, the capital of the Central African Republic (CAR), is to look down on a country that has become hell. The dark shadow cast by the UN helicopter passes over mile after empty mile of green, fertile land. The few signs of former habitation—a homestead on top of a hill, the remains of a once-ploughed field—have been burned to the ground or overrun by bush. After an endless succession of conflicts, almost all the people have fled to refugee camps guarded by the UN. There are many reasons why the CAR is in such a wretched state, but high among them is that it is Africa’s most remote country, with almost no connections to the outside world. Even ideas struggle to cross its borders. Fast internet and mobile-phone reception is available only in and around Bangui. Its people are largely illiterate.It is, in short, a country that technology has skipped over.
Source: The Economist