Causes of the commercial marginalisation of Africa
Promoting open trade systems and the emphasis on export processes since the Second World War have generated encouraging results in terms of global growth in goods with a sharp increase in trade volume, representing more than 6 billion dollars a year and exceeding its production by region today.
With having benefited from the boom of the dynamism of international trade and the various reforms and aid for developing its foreign trade, Africa has experienced an increase in the volume of trade from 45% to 50% of GDP between 1980 and 2000. However, its trade grew much more slowly than in other regions of the world, and therefore resulted in the marginalization of Africa in international trade.
According the World Bank, the share of Africa's trade in international trade has significantly declined from 5.5% in 1975 to 2.5% in 2002. Various econometric studies have also emphasized Africa's marginalization in world trade and the continent's economic dependence vis-a-vis the outside.
In this final statement, the stress is on the inadequacy and fragility of international trade in Africa, and the examinaton of the causes that would be necessary to consider for long-term solutions. Some sort of reflection should also be on the origin of the marginalization of Africa in trade?
To provide answers to these problems, this paper will analyze the position of Africa in international trade, first addressing the origination flaws in the internal boundaries of the continent. In the second section, it includes, external barriers to flourishing trade in Africa.
Africa shows a significant need for financing the infrastructure sector including the part not covered is estimated annually to nearly 35 billion dollars. Indeed, the functional infrastructure in Africa (roads, port and airport infrastructure, communication networks ) are old and inadequate.
In terms of transport infrastructure for example, a round trip between two cities in one country takes two times longer than normal, because of emergency repairs of infrastructure in the very same way.
There are also flaws in power that cause repeated power cuts in most countries and whose losses in revenue are high, and this in a continent where there is no shortage of hydropower or solar energy.
The lack and poor infrastructure remain a major constraint in international trade since it prevents the timeliness and flexibility in foreign demand. In other words, these high costs therefore limit the flow of trade of the continent, as was demonstrated in an econometric study of IFPRI.
According to it the intensity of bilateral trade between two countries is based on costs (transport costs, losses due to disruption of the production, protectionist measures .) and economic size of two countries (GDP per capita). Thus the higher the cost of trade between two countries is low (as opposed to if they had exchanged with all the rest of the world), more trade flows between them increases.
Tags: Africa; inadequacy of international trade; marginalization of Africa in trade