Opinion
Can trade make a difference in Africa?
Regional value chains, if properly exploited, can help Africa gain the critical capacity needed to compete as the continent moves up the global value chain, promoting cross-border opportunities that allow countries to contribute with different inputs to the production of intermediate and finalized products.
This could lead to a multitude of positive outcomes, such as employment creation, productivity gains, income generation and the creation of backward linkages into the economy that could lift millions of people out of poverty. Trade has yet to serve a transformational process for the benefit of human development in Africa as it has done in many other developing economies, and it is through positive linkage to development that trade can play a pivotal role.
Developing the capacity and improving the quality of its human resources is another way for Africa to enhance its competitiveness.
According to the Africa Progress Panel led by Kofi Annan, the former Secretary-General of the United Nations, Africa is on the brink of a demographic dividend with the current median age on the continent at 18. Over the past 10 years the number of youths aged 15 to 24 in Africa has increased from 133 million to 172 million. By 2020, that figure is expected to rise to 246 million.
This ‘youth bulge’, could significantly tilt the current social dynamics – either in a positive or in a negative direction – as shown in the recent North African uprisings. Investment in skills development, technical and vocational training, as well as in higher university education is necessary to transform this natural resource into a profit for the entire continent. Neither should we lose sight of the benefits of commodities-based industrialization, nor the benefits of improving the performance of the agricultural sector, which still employs a majority of Africans.
Governments have to play a better role through proper regulation of production, and put in place the right mix of trade and industrial policies needed to support local manufacturing industries that provide employment and create jobs.
Social and environmental constraints
Moreover, African leaders must implement policies that ensure access to capital, technology and labor. Measures must be put in place that create equity in global trade negotiations, ensuring fair trade and import tariff regimes for the continent’s growing industries.
