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Trade facilitation crucial for Africa
In the 1960s, there were high hopes for the development of the newly independent Sub-Saharan African countries.
However, these hopes were quickly dashed following a series of shocks which began in the mid-70s, with the first oil price spikes, followed by a severe decline in GDP growth and increase in poverty in the 80s and early 90s.
However, by the mid-1990s, economic growth had resumed in certain African countries.
Economic reform, better macroeconomic management, donor resources and a sharp rise in commodity prices were having a positive effect.
In the 2000s, many African countries witnessed high economic growth performance and during that period some of the world’s fastest growing economies were in Sub-Saharan Africa.
Angola, Nigeria, Chad, Mozambique and Rwanda all recorded annual GDP growth of over 7 per cent.
In 2012 Africa’s exports and imports totalled $630 billion.
And the long term prospects for growth are good.
The Economist Intelligence Unit has forecast average growth for the regional economy of around five per cent a year from 2013-16.
Despite all this, the continent still plays a marginal role in the global market, accounting for barely three per cent of world trade.
One significant reason – though of course there will be others – is that African economies are still narrowly based on the production and export of unprocessed agricultural products, minerals and crude oil. Now, due to relatively low productivity and technology, these economies have low competitiveness in global markets – apart from crude extractive products.
The low productivity of traditional agriculture and the informal activities continue to absorb more than 80 per cent of the labour force.
And growth remains highly vulnerable to external shocks.
So, overall you could say it is a mixed picture. But I think this story of half a century of struggle, set-backs and progress shows two things:
One – the road to meaningful and inclusive development still seems long.
Two – we are in a better position than ever to make real, sustainable progress. So we must make the most of this opportunity.
I think there are a number of essential steps to take:
- the diversification of economic structure, namely of production and exports;
- the enhancement of export competitiveness;
- technological upgrading;
- the improvement of the productivity of all resources, including labour; and
- the reduction of infrastructure gaps.
Only by delivering in these and other areas can policy makers ensure that growth enhances human well-being and contributes to inclusive development.
But how can we take these steps?
Well, I’m sure it won’t surprise you if I say that I think trade can play a vital role.
And it is worth noting here that the Trade Facilitation Agreement broke new ground for developing and least-developed countries in the way it will be implemented. For the first time in WTO history, implementation of an agreement is directly linked to the capacity of the country to do so.
Previously it was more about giving a few more years – so developed countries implement an agreement immediately and least-developed and developing countries just get a few more years.
Nobody ever talked about whether, when the deadline came, those countries would have the capacity to implement the provisions that were agreed.
So now, and for the first time, we have more than that – we are taking of a more dynamic approach.
Under the Trade Facilitation Agreement, not only does a country have to have the capacity before being required to implement the provisions, but technical assistance and support must be provided to help them achieve that capacity.
Moreover, developing and least-developed countries can determine for themselves when they have the capacity to implement each of the trade facilitation measures of the Agreement.
This has never happened before and it did not happen by accident. Members made the decision together. Africa was a big part of that.
Clearly a central element of implementing the Agreement will be ensuring that the assistance, that developing and least-developed countries need, will be available.
A great deal of very welcome work has already been done. But from my consultations with members, including the coordinators of the African Group, the Africa, Caribbean, Pacific Group and the LDC Group, I know that some real concerns remain on how easy, affordable and accessible the technical assistance will actually be.
We have been working very hard to address these issues and ensure the provision of technical assistance to everyone, without exceptions.
Roberto Azevêdo is World Trade Organisation Director General. This article is extract of a speech he delivered during the African Union Forum on Industrialization and Inclusive Development in Africa on 1 July 2014. Click here to read the full speech.
