32.8 C
Tunisia
Monday 26 July 2021
HomeNewsTrade barriers hinder Africa’s economic growth - World Bank

Trade barriers hinder Africa’s economic growth – World Bank

A World Bank report has said African countries must remove the various continental trade barriers, especially with neighbouring countries, in order to achieve economic integration and increase earnings through trade.

The private Guardian Newspaper on Monday quoted the Bretton Woods institution as saying that the trade barriers deprived the continent of new sources of economic growth and new jobs, while increasing poverty.

It noted that the cross-border production networks that have spurred economic dynamism in other regions, especially East Asia, have yet to materialize in Africa.

The report said many African countries were losing several billions of dollars in potential trade earnings every year, because of high trade barriers with neighbouring countries, noting that it was easier for Africa to trade with the rest of the world than with itself.

“It is clear that Africa is not reaching its potential for regional trade, despite the fact that its benefits are enormous – creating larger markets, helping countries diversify their economies, reducing costs, improving productivity and reducing poverty.

”Yet trade and non-trade barriers remained significant and fall most heavily and disproportionately on poor traders, most of whom are women,” the outgoing World Bank’s Vice President for Africa and former Nigerian government Minister, Ms. Obiageli Ezekwesili, was quoted by the newspaper as saying.

”African leaders must now back aspiration with action and work together to align the policies, institutions and investments needed to unblock these barriers and to create a dynamic regional market on a scale worthy of Africa’s one billion people and its roughly US$2 trillion economy,” she said.

Despite the global financial crisis, the report said most sub-Saharan African (SSA) countries grew rapidly and often at much higher rates than the world average.

It noted that the economic growth in the countries in such region was robust and driven by the boom in commodity prices, which led to very high growth in export values, especially for minerals, to new fast-growing markets such as India and China.

The report added that while exports have grown strongly over the last decade, and the region’s trade has recovered well from the global crisis, the impact on unemployment and poverty has been disappointing in many countries.

In South Africa, unemployment remained around 24%. In Tanzania, extreme income-poverty appears to have remained broadly constant at around 35% of the population.

The report said regional fragmentation could become even more costly for the continent with new World Bank forecasts suggesting that economic slowdown in the Eurozone could shape Africa’s growth about 1.3 percentage points this year.

It said while uncertainty surrounds the global economy and stagnation is likely to continue in traditional markets in Europe and North America, enormous opportunities however exist for cross-border trade within Africa in food products, basic manufactures and services remained unexploited.

“Imagine the benefits of allowing African doctors, nurses, teachers, engineers and lawyers to practice anywhere in the continent, but responsibility for making this happen lies with countries first and foremost.

”The final prize is clear: helping Africans trade goods and services with each other. Few contributions carry more development power than that,” World Bank’s Africa Director for Poverty Reduction and Economic Management, Marcelo Giugale, said.

To escape the current straight jacket of trade fragmentation, the report said African leaders need to pursue changes in key areas, including improving cross-border trade, especially by small poor traders, many of whom are women and by simplifying border procedures

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

MOST POPULAR

HOT NEWS