The multilateral trading system overseen by the World Trade Organization (WTO) has contributed significantly to the unprecedented economic development that has taken place over the last decades across the world. Trade has allowed developing countries to benefit from the opportunities created by emerging markets enabling them to integrate into the world market through global value chains.
With the global fluctuation in trade and rapid increment, the structure and pattern of trade vary significantly by-products and regions. Undoubtedly, trade has come with both benefits and daunting challenges to countries involved, especially in African nations, where primary and intermediate merchandise formed a substantial share of exports.
African trade in goods and services fluctuated in value terms over the 2005-19 period and gradually rose. Despite this increase, however, its global share has remained relatively constant at about 3% of both global exports and imports, averaging a total of US$760 billion, compared with $4,109 billion from Europe, $5,140 billion from America, and $6,801 billion from Asia.
With these, it is seen that Africa has performed poorly when global trade is concerned. Nigeria which is the largest economy in Africa with a GDP of $442.98 billion, depends heavily on importation and does little on exportation. As seen from the chart below, Nigeria made over $ 1 trillion on exportation in 2020 and spent almost $2.5 trillion on importation which is doubled the money made from exportation. This reflects the level of participation in global trade of the country.
In spite of the significant reduction of trade tariffs on various commodities and products that African countries have taken advantage of, trade still faces stringent constraints largely because of restrictions and other distorting measures. Despite the fact that the WTO has gained ground in pressuring countries to reduce restrictions, trade policies and rules may have favored developed economies at the expense of frail economies, particularly in Africa.
The South African minister of finance has highlighted that one of the significant challenges hindering trade in Africa High tariffs, but “non-tariff barriers, such as arbitrarily imposed rules on the international standards on the health of and animals plants (sanitary and phytosanitary measures (SPS)), further limits trade in Africa.
Sanitary and phytosanitary (SPS) measures are quarantine and biosecurity measures which are applied to protect human, animal, or plant life or health from risks arising from the introduction, establishment, and spread of pests and diseases and from risks arising from additives, toxins, and contaminants in food and feed. These measures are governed by the World Trade Organization’s (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures (the SPS Agreement), and its Committee of Sanitary and Phytosanitary Measures (the SPS committee). Measures like too high level of Aflotoxins have been used by some developed countries to hampers trade on goods coming
For quite a long while in the late 1990s, for instance, European nations prohibited fish from Mozambique, Kenya, Uganda, and Tanzania due to concerns about these countries’ sanitary standards and control systems. Uganda lost $36.9 million in potential earnings during the ban. In Tanzania, where fish and fish products accounted for 10 percent of annual exports, fishermen dependent on EU sales lost 80 percent of their income, according to reports from the United Nations. Several other health and standards issues relating to products like meats and dairy products have also restricted Africa’s trade to the US and Japan.
These measures only seem to favor the already developed countries, as many developing countries in Africa do not have the money, manpower, or infrastructure needed to abide by the standards created.
On the other hand, although these measures appear to be though, it is important to also emphasize the fact that they are ostensibly aimed at protecting citizens from everyday food hazards because some of these developing countries make products that are harmful to the health and expect them to be purchased by other countries, and when they are not, it leads to a downturn in export which then reflects on their GDP.
The best solution to this hamper in trade for Africa is to trade in Common Terms. Countries at the same level of compliance to the WTO Sanitary and Phytosanitary measures need to do more Intra-African trade with themselves and other similar eternal countries, as this will help ease the burden on them and prevent wastage of locally produced product (e.g, Nigeria’s annual tomato harvest is estimated to total at around 1.5 million tons, 900,000 of which rot as waste each year, thebusinessyear).
With the inception of the African Continental Free Trade Area (Afcfta), trade in Africa was expected to create a boost in intra-trade trade amongst African countries but the organization has made no significant impact since its inception. Although 54 countries have signed the pact and 31 of them have ratified it, only Ghana has traded under this agreement as other countries like Nigeria do not have the capacity and infrastructure for the agreement’s benefits to kick in.
In as much as these sanitary and phytosanitary measures seem intense, it is really not expected of already developed countries to comply with lower measures. Developing countries need to work towards improving the quality of their products as these measures were established to ensure the safety of both parties.
The multilateral trading system overseen by the World Trade Organization (WTO) has contributed significantly to the unprecedented economic development that has taken place over the last decades across the world. Trade has allowed developing countries to benefit from the opportunities created by emerging markets, enabling them to integrate into the world market through global value chains. With the global fluctuation in trade and rapid increment, the structure and pattern of trade vary significantly by-products and regions. Undoubtedly, trade has come with both benefits and daunting challenges to countries involved, especially in African nations, where primary and intermediate merchandise formed a substantial
French President Emmanuel Macron is hosting leaders of African countries and heads of global financial institutions for a summit that will seek to provide the continent with critical financing swept away by the impact of COVID-19. Some two dozen African heads of state are attending Tuesday’s summit in Paris, one of the biggest in-person top-level meetings held during the pandemic. International financial leaders attending included International Monetary Fund (IMF) chief Kristalina Georgieva as well as World Bank managing director of operations Axel van Trotsenburg. The summit got under way at 11:00 GMT and is due to wind up with a 16:00 GMT
European, American and African leaders, together with financial institutions, are looking for ways to help restart growth in Africa after the Covid health crisis when they meet in France this week. Described as a “New Deal” for African economies, they aim to find solutions to Africa’s international debt, which could see the continent fall into recession. The BBC’s Maggie Mutesi says it’s the big economies that are at the table and they’ll be looking at a range of problems. For Zambia, a country which is indebted to China, the problem is one of how to meet its obligations now. While countries like Mozambique, suffering
Nigerian President Muhammadu Buhari on Friday confirmed his nation's commitments to the Paris Agreement at the U.S.-led climate summit. Speaking virtually to the White House from Abuja, Buhari said since 2016, Nigeria had undertaken "major environmentally sound and climate friendly programs." He said institutional frameworks have been made to cut emissions by 2030. "Beyond ending gas flaring by 2030, the oil and gas sector has undertaken steps for diversification, risk management systems, insurance (indistinct) research and development and energy crisis planning", Buhari said. Kenya's President Uhuru Kenyatta laid out the African nation's targets for clean energy and reducing carbon emissions at the U.S.-led climate
Uganda’s 76- year old Yoweri Museveni has been sworn in for his sixth term as President of Uganda. Museveni won the elections held earlier this year with 58% of the total votes despite wide reports of irregularities. The swearing-in ceremony held in Kampala on Wednesday and was attended by 4,000 invited guests, including diplomats, local politicians, 11 heads of state from Kenya, Tanzania, South Sudan, Namibia, Burundi, Zimbabwe, Guinea, Ethiopia, the Democratic Republic of Congo, and Somalia. All of those who attended wore masks and observed social distancing due to the coronavirus pandemic. In his inauguration speech, President Museveni said he had
In the move to deepen trade and tourism relations between Kenya and Tanzania, Kenya will no longer demand visa and work permit requirements for Tanzanian nationals. This was announced by Kenyan President, Uhuru Kenyatta on Wednesday, 5th of May during a joint session of the Kenyan and Tanzanian business community in Nairobi, which was attended by the visiting Tanzanian President Samia Suluhu. This effort is aimed at fast-tracking the implementation of the East African Common Market Protocol allowing workers to move freely in the region, attracting foreign investment, and boosting tourism without compromising national security. “The objective is to
Africa is watching aghast as India struggles with coronavirus, fearing a long-running shortfall in the Indian-made vaccines that it needs to help protect its people. Often dubbed the “pharmacy of the world”, India is one of the biggest suppliers of the AstraZeneca vaccine under the COVAX programme to help immunisation in poorer countries. But India has been hammered by an explosive growth in infections – accelerated, say scientists, by a new variant. The country has recorded 22 million cases out of a population of 1.3 billion, and a death toll of nearly a quarter of a million. After sending more than 60 million doses
Health officials in Botswana say they have reached agreements to get enough COVID-19 vaccine injections to treat the country’s whole adult population and are set to becoming the first African nation to be fully vaccinated. The agreements were announced this week in a speech by Mosepele Mosepele, a member of Botswana’s Presidential COVID-19 Task Force. The Southern African country has had a total of over 48,00 confirmed COVID cases and less than 800 deaths so far. Last month, Botswana received 60,000 doses of the COVISHIELD vaccine, which is manufactured by the Serum Institute of India. Additionally, the government received 200,000 doses
The Ugandan parliament has passed a controversial Sexual Offences Bill which contains clauses that criminalizes same-sex relationships and sex work. The bill which awaits the signature of President Yoweri Museveni prescribes a five-year jail term for anyone guilty of same-sex acts and has been pending since 2014. Although the new bill protects victims of domestic violence within and outside marriage, gives women the right to withdraw consent, it, however, puts queer Ugandans in a precarious and vulnerable position. Read Also: Uganda launches drone carrier in its war against HIV/AIDS Frank Mugisha, director at Sexual Minorities Uganda said: “It is unfortunate that the parliament of
The African Export-Import Bank (Afreximbank) in collaboration with the African Development Bank (AfDB) released a report on the 15th of April 2021, analyzing the influence of the COVID pandemic on trade and finance activities in Africa. When Covid-19 hit Africa, a sharp decrease in global trade was followed by a rapid contraction of economic output. The International Monetary Fund (IMF), quoted in the report, found that the global economy shrank by approximately 3.5%, worse than the 2007-2008 global financial crisis. Nigeria, Africa's largest economy, contracted by 6.1% in 2020. GDP in South Africa shrank by 7%, the first contraction in 11 years. The