Business
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Prior to the economic crisis, Africa’s share of trade with other emerging markets was a mere 30 percent. Today that has gone up to nearer 50 percent, and by 2020, on current trends that could be as much as 70 percent
ONE of the themes at this year’s African Development Forum, an ECA event, which held in Marrakesh, Morocco, was new forms of partnership. The idea is to move away from development assistance and adapt to the realities of today. Global economic trends reflect the ongoing geopolitical and economic rebalancing in favour of developing and emerging economies, particularly Brazil, China and India, all of which call for stronger South-South partnerships.
At the opening of the session, Inyang Ebong-Harstrup, deputy director of the UN Office for South-South Cooperation, said, “I believe there is a deep sense that south-south should be the foundation for Africa.”
According to the ECA report, in Africa, for example, developing countries’ exports and imports have increased from just 26 to 43 per cent in 15 years, and from 33 percent to 50 per cent, respectively. Furthermore, foreign direct investment from the five emerging economies known as the BRICS countries – Brazil, the Russian Federation, India, China and South Africa – reached 25 per cent of total foreign direct investment in Africa in 2010 and continues to increase. There is, moreover, considerable scope to further strengthen Africa’s engagement with its southern trade partners in ways that promote structural reform while avoiding the so-called “primary commodity trap” or a “race to the bottom” by countries seeking to attract foreign investment.
Nkosana Moyo, founder and executive chair, Mandela Institute for Development Studies, South Africa, said, “We have to look within and act together. It is true that economic indicators show us that Africa is rising but it would be good to find correlation between indicators and activities. I believe, the world is excited about us because we have resources and we have our markets.” He cautioned, “But we should not become a dumping ground for other peoples’ goods”
Professor Adebayo Olukoshi, director of IDEP, seconded Moyo’s sentiments saying: “For too long our continent has been engaged in partnerships that are unfavourable to us. It’s true that things are changing but we need to understand and learn to partner in such a manner that we do not lose out in our deals. I strongly believe that no one is going to come to Africa to develop us. We have to do it for ourselves.”
On a positive note, Symerre Grey-Johnson of the New Economic Partnership for African Development, NEPAD, pointed out that African countries were already coming together to form positive partnerships as in the case of agricultural trust funds wherein the main contributions have come from Angola and Equatorial Guinea.”
Speakers at the event agreed that intra-trade among African countries is very low. Last year, it stood at 7 per cent. The level of intra-trade among African countries compares unfavorably with other regions of the world. Intra-trade among the European Union, EU-27 is around 70 per cent, 52 per cent for Asian countries, 50 per cent for North American countries and 26 per cent for South American countries.
Ebong-Harstrup stressed that for a strong foundation in partnerships it is essential to have constructive partnerships within the continent. She said, “We can’t grow without trade between African countries. Why didn’t the three African countries get together to deal with Ebola? We need to finance our development without looking to the North.”
The Economic Commission for Africa, ECA, advises that new partnerships must also take into account the increasing complexity of development finance. New actors have emerged, including development partners from the global South and private philanthropic foundations, and innovative assistance modalities. While traditional donors still tend to allocate most of their aid budgets to initiatives promoting social development, southern development partners tend to focus on infrastructure projects and productive sectors.
The ADF Forum is a flagship biennial event of the Economic Commission for Africa, and offers a multi-stakeholder platform for debating, discussing and initiating concrete strategies for Africa’s development. The Forum looks to establishing an African-driven development agenda that reflects consensus and leads to specific programmes for implementation.
This year’s theme is Innovative Financing for Africa’s Transformation, focusing on domestic resource mobilization; illicit financial flows; private equity; new forms of partnerships; and issues in climate financing.
— Oct. 27, 2014 @ 01:00 GMT
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