Posted on July, 19, 2016 at 09:42 am
Luke Mulunda
Kenya has thrown itself at the centre of world trade negotiations. Last year, it hosted the World Trade Organisation, and now it is hosting the Unctad and, alongside it, the World Economic Forum.
Of course this gives us good publicity but by no means lessens the big issue confronting Kenya and its African peers in trade issues. Why there have been grumbles from Africa when it comes to world trade affairs is a simple fact: the rest of the world has been unfair to African countries.
While they get free access to our markets, they have often set conditions and quotas for African products, mostly agricultural commodities. In addition, some trading blocs, such as the European Union, have home policies that negate the existence of this already conditioned market access; for instance, through huge subsidies that make African products less competitive.
The current global trade slowdown and lack of productive investment have increased the rift between the countries that have benefited from globalisation, and those that continue to feel left behind, mainly African and other developing countries.
The regulatory frameworks governing trade, investment in agricultural production, and technology related to agricultural productivity, play a critical role, but have never been tweaked to reflect these imbalances in global trade. Developed nations, with their high-level technologies and huge rebates for their producers, control the international market.
This has pushed others onto the periphery and caused losses to many producers in African farms and villages. In turn, this has inevitably resulted in job losses and more poverty.
Whatever actions Unctad takes over the next two decades— especially in the areas of trade and investment—require that we tap technology and innovation and build models that promote sustainability. Trade and investment, and now technology, are some of the most powerful avenues of helping end poverty in the world.
In the meantime, Africa must learn to trade with itself. The critical role of inter-Africa trade cannot be overemphasised. Africa’s one billion people make a huge market for commodities that often have to meet tough conditions to access other markets. Look at the US and China: their home populations are their first and yet biggest markets.
Kenya’s biggest trading partner is Uganda. If such trade relations were replicated across the continent where countries trade more with each other, Africa can become one huge, and powerful, trading bloc that dictates its market terms.
Egypt is among big buyers of Kenyan tea. Ghana can find more consumers in Africa for its cocoa just as Nigeria sells the bulk of its films on the continent. But first, African countries should talk to each other more.
The writer is the managing editor of businesstoday.co.ke. Email: lmulunda@businesstoday.co.ke
Source: Business Daily Africa