DEVELOPMENT: Global Trade By-passes Africa, U.N. Warns

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Jun 12 1996 (IPS) - Global trade is by-passing the economically-beleaguered African continent, the United Nations warned Wednesday.

Between 1990 and 1995, Africa’s share in world trade declined by 30 percent, from 3.1 percent to 2.2 percent, according to new statistics released by the world body.

In its annual 15-page socio-economic survey of the continent, the United Nations said that Africa has failed to take advantage of the dramatic growth in world trade.

“This is primarily due to its diminutive and declining share in world trade and its continued dependence on primary commodities,” it said.

“The effect of the failure to diversify and graduate to secondary and tertiary commodities has increasingly marginalised Africa’s share of world trade and trade among developing countries,” the survey said.

Compared with the 1980s, Africa gross domestic product (GDP) in the 1990s has accounted for less and less of the global GDP.

The survey also said that the social crisis in Africa — in the fields of health, education and population growth — remained severe last year.

“This situation once again highlights the critical need for African countries to restructure and reorient their policies towards enhanced social development and poverty reduction,” it said.

But Djibril Diallo of Senegal, head of the division of public affairs at the U.N. Development Programme (UNDP), said the biggest tragedy facing the continent is that even as most African countries implement their structural adjustment policies, they are facing stringent new conditions on international support.

“It is a lose-lose situotion, as far as African countries are concerned, ” Diallo told IPS.

The World Bank and the International Monetary Fund (IMF) are conditioning development aid to Africa on domestic political and economic reforms, including good governance, privatisation, devaluation, removal of subsidies and reduction of budget deficits.

But Diallo said that even though some of the countries in the region — including Mali, Burkina Faso and Senegal — have met most of these conditions, there have been no additional resources pumped into these fragile economies. “They are in effect fighting a losing battle,” he said.

The survey said that in 1995 Africa experienced modest economic growth for the second consecutive year. The GDP of the region increased by 2.3 percent compared with 2.1 percent for 1994.

Despite this modest recovery, GDP growth is yet to outpace population growth of 2.3 percent. As a consequence, per capita income declined by 0.6 percent in 1995.

Net flows of official development assistance (ODA) to Africa declined from 25 billion dollars in 1992 to 23.5 billion dollars in 1994.

The decline is attributed to three factors: the growing demand for aid from the former Eastern Europe and Soviet republics, the reorientation of aid policies by donors and the fiscal constraints in donor countries.

Civil conflicts and political stalemates in governance have continued to disrupt and paralyse production — especially in Burundi, Liberia, Rwanda, Somalia, Sudan, Zaire and Sierra Leone.

The survey said that only eight of the 51 African countries had impressive GDP growth in 1995: Burkina Faso (six percent), Cote d’Ivoire (6.6 percent), Ghana (6.9 percent), Kenya (6.1 percent), Malawi (6.2 percent), Mali (6.0 percent), Togo (6.7 percent) and Tunisia (6.7 percent).

The United Nations also said that globalisation and liberalisation present a number of potential challenges and opportunities to Africa.

“The ability of African countries to take advantage of the emerging opportunities in world markets depends crucially on their ability to foster the development of internationally competitive industries which can meet exacting standards of cost, quality, reliability and delivery schedules,” it noted.

“The supply capacities of African countries, which are very weak for a variety of reasons, are likely to be the major constraints on their ability to exploit the opportunities arising from globalisation,” it added.