Why more intra-African trade, technology transfer won’t be easy

09Aug 2019
Michael Eneza
Dar es Salaam
The Guardian
Why more intra-African trade, technology transfer won’t be easy

PRESIDENT John Magufuli has appealed for intensification of intra-technology transfer among African countries to facilitate trade improvement and move the continent out of poverty.

Leaders at past AU Boosting Intra-African Trade Workshop on Trade Finance and Trade Information in Africa. File photo

It is a combination of actions which if taken intensely enough and in the right direction, has a potential to unlock plenty of the continent’s potential, but it is definitely not an easy matter.  It isn’t the first time this idea comes up.

The president was speaking at the opening of the Southern African Development Community (SADC) Industrialization Week and Exhibition in Dar es Salaam, where he said industrialization has marginal contribution to economic development of the continent due to trade barriers. That is indeed the case as Africa experiences trade barriers the way countries all over the world put up such barriers to protect local industries or other producers. Africa has few trade barriers with Europe as it sells free, taxes imports high.

Conference reports indicated that this year’s Industrialization Week is hosted under the theme ‘A Conducive Environment for Inclusive and Sustainable Industrial Development, Increased Intra-Regional trade, and Job Creation,’ which is a statement of purposes rather than a precise summary of what can be achieved. It is more in line with what Africa wants rather than what it has already sketched out in terms of methods as practical and feasible, on the basis of economic models thus tested. There is plenty to do here.

President Magufuli said there will be more trade opportunities in Africa if intra-African trade and exchange of technology are enhanced, which must have been difficult for the delegates to grasp what it meant, until it was elaborated.

He said that in simple words Africa consumes what it does not produce and produces what it does not consume, therefore the region needs to work on conducting business within the various countries and in that context it will be able to move forward. There was a definite limitation of vision while the purpose is candidly expressed, as the problem is that technology is hardly located here.

While observers and policy advisers felt that the Industrial Week and exhibition offers an opportunity for African and especially SADC countries to discuss how best to conduct business and support each other by opening markets for each other and ending trade barriers, it was easier said than done.

The catch to the problem is embedded in the notion of ‘helping each other,’ as it refers to a situation where opening markets and removing trade barriers might not yield the best results for domestic industries. If this is still the main expectation at the level of policy making, it will be difficult to reverse it just to help one another.

There was also a vital statistic that industries contribute only 11percent to GDP of the economic bloc, in which case Africa and the SADC zone in particular ought to work to emulate developed countries in Europe and Asia as they chiefly invested in industries.

This is true at the general level as to what those countries did, but it doesn’t say how they did it, how they ensured that they reach those results, and why in particular socialist countries in Europe and the Far East failed in industrialization until they moved to open up their economic systems, to enable foreign investments. We have such a situation, but in what manner can it be described as adequate to elicit the Far East and even South Asia results, industrially?

Nor indeed can it be said that Tanzania Private Sector Foundation (TPSF) chairperson Salum Shamte in his remarks provided a higher level of clarity on the issue, except that he was clearer on the potential of the private sector in Africa fast developing by being well harnessed, were current border barriers to be removed.

Rapidly it can be stated that the matter looks altogether easy to economic pundits at present, a kind of paradigm shift from direct support to industrialization to improving the business environment. It is a shift in language that has not been expressed in distinctive policy, but it is a substantial shift as well.

Calls for the private and public sectors to work together to address the bottleneck represents the routine salutation to facilitate what is usually described as dialogue between the private sector the public sector though in actual fact it it conducted with the public authorities, not ‘sector’ per se.

Shamte insisted that if Africa and thus SADC is to create economies of scale it needs to remove cross border trade barriers, which is definitely true for major agribusiness firms present in the conference, but it isn’t demonstrated to be true of the peasant economy, just by formulating it in those terms. Reconciling the two is complicated.

He for instance echoed the president’s sentiments in asking why we are we using billions of dollars to import food yet we have 60 per cent of the available arable land globally.

That this question is being asked nearly 60 years after independence speaks a lot about how rapidly Africa has been moving in its capacity for fashioning out economic models, and in that same context, what would have improved at the moment. Where was the Economic Commission for Africa and national economic planning bodies while this situation has developed for the past six decades? If we failed to solve it then, are we better at present?

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