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Africa’s Low Hanging Fruit: More Trade

Via Meadia has never shied from confronting the development world for its penchant for unseemly aid boondoggles. That doesn’t mean we’re intractable pessimists on Africa. Far from it.

Consider one of the region’s problems: intra-African trade scarcely exists. As the WSJ reports, many African nations lack both adequate infrastructure and coherent border policies with neighbors, with the eye-popping result that only 10 percent of African trade occurs between African countries. (For reference, 60 percent of EU trade is occurs between EU members.) The World Bank estimates that Africa loses billions of dollars of trade because its countries are unable or unwilling to trade with their neighbors to any significant degree. Read Dalibor Rohac’s excellent AI piece on Rwanda for a specific example of how this can hold back development in even relatively well-run countries.

The World Bank report concludes, and Via Meadia agrees, that one key to African development is promoting Sub-Saharan trade.

It’s not just tariffs or patterns of investment and corporate relations.  Africa’s infrastructure reflects the goals of the colonial powers: the colonizers built road and rail systems for the purposes of shipping goods to ports and then north rather than trying to create connections and networks in Africa itself.  Change some trade policies, build some road and rail networks, and Africans will prosper more as they trade with each other.

That something so simple can bring such large results is reason for hope; that something so simple and useful has been left undone for fifty years points to the huge obstacles in the path of Africa’s growth.

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