Trade liberalisation brings little economic gains to Africa

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GENEVA, Sept 16 (AFP): Africa has opened up its markets significantly to trade, but the move has not given the needed push to the continent's export performance, a United Nations trade and development agency report said yesterday.
The UN agency said that despite trade liberalisation, African exports were still insufficient in terms of quality and quantity to gain a foothold in foreign markets.
Average tariffs for the continent fell from 21.7 per cent in 1995 to 13.1 per cent in 2006, but the average ratio of exports to gross domestic product climbed to just 26 per cent from 23 per cent.
This increase amounted to a 11-per cent growth, much lower than the 50 per cent increase (growth from 21 to 31 per cent) posted by non-African developing countries after trade liberalisation, said the UN Conference on Trade and Development (UNCTAD). "Overall, export performance in African countries following trade liberalisation has been disappointing.
"Indeed, although there has been a positive effect of trade liberalisation on exports expressed as a percentage of GDP, this effect is weak and the overall trade balance in African countries has deteriorated since liberalisation," it said.
In terms of export volumes, growth was only at 5.8 per cent per annum during the period 1995-2006, the slowest for all regions around the world and below the world's average.
"Even more worrying is that there has been little diversification in the exports composition," Charles Gore, who wrote the report, told journalists.
"Overall, one may characterise export performance as modest though in value terms, this has been masked by the recent commodity price boom," he added.
For Gore, trade liberalisation in the continent should have been accompanied by policies that would help to facilitate trade.
"With hindsight, one can say that the lack of complementary policies was a wrong policy choice, we could also say that with hindsight that the speed of trade liberalisation was very fast in relation to existing structural and institutional constraints," he said.
The continent's failure to support its agriculture sector led it to become a net food importer from a net food exporter, said the report as it called for more efforts to develop the farming sector.