VOICE OF LIBERTY AFRICA: African development and the necessity of increased intra-Africa trade ~ Adewale Bankole

 

In recent times, I have made several journeys across African borders. I am not a cross-country merchant, nor a Sahara Tuareg; most times my quest was to attend conferences and to facilitate free market ideas among like minds across borders, and these adventurous trips have given me the opportunity to see and experience the state of several border posts in Africa.

 

It is pertinent to note that, since independence, Sub-Saharan African (SSA) governments have concluded a large number of regional integration arrangements (RIAs). Yet, intra-regional trade remains comparatively low.

It is also appalling to state that most regional African borders are rustic and do not facilitate trade among neighbouring countries. The immigration office at every border is like a cartel, bringing shame to the RIAs and in effect negating the African Union charter. At every check point, money is expected to be paid – bribery is an open transaction – or a person or goods will not be allowed pass through.

For instance, trucks driving between Lagos and Abidjan will experience, on average, 46 checkpoints, and drivers often have to spend days, even weeks, waiting for uniform and non-uniform customs, immigration, quarantine, anti-drug, and other state agents' clearance. Compare to the European Union which has ended that sort of strenuous border-crossing harassment. Today, travelling among EU countries is much like driving between cities within a country.

 

This continuous high barrier among SSA countries coupled with incessant corruption contributed to the recent poor rating of Sub–Saharan Africa by Transparency International in its 2012 Corruption Perception Index (CPI), in which SSA countries were comfortably sitting at the bottom of the index. These further depict an empty boast by most SSA leader’s claim that corruption has gone down under their watch.

 

Amusingly, most African leaders are jesters, they have openly called for further trade liberalization; they urge an end to protectionist policies in the developed world while they refuse to open their own borders even to their immediate neighbours.

Other identifiable problems to greater African trade include export and import bans, variable import tariffs and quotas, restrictive rules of origin, and price controls.

Policies are poorly communicated to traders and officials, while the process in turn promotes confusion at border crossings, limits greater regional trade, creates uncertain market conditions, and contributes to price volatility.

 

A Cato Institute scholar, Marian L. Tupy stated that Free Trade continues to be misunderstood by African leaders. The most important misunderstanding concerns the positive impact of foreign and regional competition on stimulating domestic production, widening the circle of people's transactions; it brings benefits to consumers in the form of lower prices, greater variety, and better quality, and allows companies to reap the benefits of innovation, specialization, and economies of scale that larger markets afford which in the long-run enhance prosperity, both nationally and personally.

Unfortunately, Import and cross-border trade are often seen as a threat in Africa, which is why SSA leaders emphasize exports and access, in order to develop world markets, as opposed to opening their own countries to foreign goods.

A recent study reveals that average tariffs in Africa are still significantly higher than in the rest of the world. Despite clear economic benefits – a World Bank study estimated that a 20 per cent reduction in border-crossing time alone in Africa would generate 15 per cent savings in transport prices – regional economic communities have not gone as far as expected in easing cross-border business linkages.  Another new World Bank report indicates that the continent will generate an extra $20 billion yearly if its leaders can agree to do away with trade barriers that hinder more regional vitality.

 

Instead of African leaders to facilitate and implement policies that can solve the stated problems and ease intra-regional trade, they were and are busy seeking and negotiating for foreign aid, yet “it would take no donor money to keep borders open around the clock” says Greg Mills, a Director of the Johannesburg based Brenthurst Foundation.

For Africa to succeed, African governments must put people and sound ideas first rather than narrow-minded political interests at the heart of development. The governments must look beyond their conventional wisdom of emphasizing exports and access to develop world markets as opposed to opening their own borders for free flow of trade.

SSA countries must begin by liberalizing their economies, and open their borders with one another and indeed with the rest of the world. They should not be afraid of unilateral liberalization – China, India, Chile, Hong Kong, even the Africa example, Mauritius, have done so in the past and reaped the benefits. After all, as we all should have learned from history, if people and goods don’t cross borders soldiers will.

 

Adewale Bankole is a foremost Nigerian Libertarian and an African Liberty associate

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