Africa's economic freedom lies in intra-trade and clean energy
Image by: SHAYNE ROBINSON/GREENPEACE
The adoption by the African Union of a plan to create a continental free trade area by 2017 brings fresh hope that Africa may be finally waking up from its centuries of slumber and taking an initiative towards its economic freedom.
The plan is an ambitious one, and if continental leaders can keep their egos aside long enough for it to succeed, it could be the catalyst for Africa’s economic freedom. The estimated cost of developing Africa's infrastructure is around $60-billion over the next 10 years.
The AU said at the end of its 18th summit in Addis Ababa, Ethiopia, on Tuesday that the Continental Free Trade Area would strengthen intra-trade and deepen market integration.
This is what has been missing in our approach as Africans to economic growth. Promoting intra-trade would contribute significantly to economic growth, poverty alleviation, employment creation and industrial development.
This will in turn lead to better integration of Africa into the global economy, and hopefully we will no longer need the begging bowl.
The plan is to get the East African Community, the Southern African Development Community and the Common Market for Eastern and Southern Africa working together in close cooperation by 2014. The bigger picture is the final consolidation of all the regional trading blocks between 2015 and 2016.
The emphasis was on the need for increased spending on infrastructure, major projects in hydroelectricity, oil refining and gas pipelines, accelerating the construction transport links and modernising railways and increasing the capacity of ports.
The world is going green and Africa, with its abundant unused land, has a great opportunity to developing renewable energy resources and lead the way towards clean, reliable and affordable energy.
We have always been looked at as the darkest continent because of our low industrialisation compared to the developed world.
This is now our advantage going forward. Instead of looking to follow the same industrialisation route Europe, North America and Asia took, we can go the clean energy route and actually become leaders in that field. It is possible. All it will take is the political will of our leaders.
We can start our own energy companies as well as attract those foreign ones currently developing renewable energy technology. The opportunity is knocking Africa, please open the door.
Continental intra-trade is the way to go instead of us individually fighting to break into the already over-saturated European and North American markets.
South Africa for instance is a net a food exporter, selling abroad 30% more agricultural goods than it imported in 2010, according to the latest South Africa Survey, published last week by the South African Institute of Race Relations in Johannesburg.
Agricultural exports grew by 10% between 2008 and 2010, with total agricultural exports amounting to $6.8bn in 2010. During the same period, agricultural imports increased by just less than 1% and amounted to $5.2bn.
Agricultural exports stood at 5% of South Africa’s total exports in 2010, with agricultural imports accounting for 2% of total imports.
The Institute’s analysis was based on data supplied by the Foreign Agricultural Service at the United States Department of Agriculture.
The data revealed that the Netherlands was South Africa’s largest agricultural export destination, accounting for a little over 10% of South Africa’s total such exports in 2010, worth $700m.
Between 2008 and 2010, the demand for South African agricultural exports grew in Asia and Africa while the proportion of such exports going to European countries declined.
Argentina has remained South Africa’s largest source of agricultural imports since 2008. However, the proportion of such imports from Argentina has fallen from 17% in 2008 to 12% in 2010, when they were worth $628m.
The ratio of agricultural imports to exports has increased since the mid 1960s, when the ratio of imports to exports stood at 1 to 5.
In the decade between 1995 and 2005 the ratio of agricultural imports to exports stood at 2 to 3.
In 2007 agricultural imports temporarily exceeded agricultural exports by a ratio of 11 to 10.
‘Recent data indicates that demand for South African agricultural products is not only holding steady, but is in fact growing’ said Mr Jonathan Snyman, a researcher at the Institute.
‘Food security is an especially precarious state of affairs in sub-Saharan Africa, so it is a positive development that South Africa has maintained its status as a net agricultural exporter’ added Mr Snyman.
If South Africa imported from African countries, the $628m paid for agricultural imports from Argentina would be staying right here in the continent, and contributing towards economic development.

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