Friday, July 16, 2004

Increasing Intra-Africa Trade

The BBC's website has an article about how trade among African nations is too low. Such trade accounts for only 10% of their total exports and imports. The Economic Commission for Africa, which did the study, blames poor transport links among African countries. Thus, colonial-era patterns remain, with most trade still to and from former colonial powers.
Poor transport links are certainly a huge problem. When it costs only $1,500 to ship a car from Japan to the Ivory Coast, but $5,000 to do it from Ethiopia then that's highly problematic. However, I primarily blame other sources: high tariffs, kleptocratic governments, and political instability. Regional markets can't work when one fears that the ruler will change next week. Or when trade barriers are so high that there's no incentive to trade with one's neighbor. Or one's hard-earned dollars goes into some dictator's Swiss bank account or Paris shopping spree for his wife. As resource-rich as it is, we shouldn't read that Africa is the only world region that's no better off than 25 years ago. Shameful.
However, I'm optimistic. God is saving the best for last! This is a huge market for the future, since Africa's cell phone market is growing rapidly. Now, if Africa can kick those Marxist rulers to the curb and get some free-marketeers in the mix. However, this is work that only Africans, not black Americans or anyone else, must do. 


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