by Brian Kurbis
As Professor de Waal closes his article, he rightly alludes to the fact that it is up to an impassioned citizenry to permanently change the national institutions of their country. But what does this mean for policymakers in the international community, specifically those most interested in empowering populations and ensuring inclusive economic growth?
Economic inequality in sub-Saharan Africa (SSA) is not a new phenomenon. Since their respective independences, many countries in SSA have developed institutions that have created incentives for political and economic elites to maximize up-front rents from extractive industries and to ensure there are no disruptions to the flow of rents or threats to their political power. Maintaining this status quo, which benefits few, has often been prioritized over developing a nation and shared economic success. It is within this reality—where entrenched interests overrule the public interest—that the international community must formulate its policies.
The dynamics and systems of the political economy and interests of a country’s elites demand meaningful evaluation before any strategy or policy is pursued. If policymakers in the international community want to promote policies in SSA to broaden the base of the economic success in the region, as well as foster public demand for institutional change, then current policies need to be revised. One key area where this “rethink” of international policy would be beneficial is on supporting intra-African trade liberalization.
Expanded trade has the potential to not only promote additional growth but to make it more equitable. According to theUnited Nations Conference on Trade and Development (UNCTAD), expanding intra-African trade would support growth in the manufacturing sector, and thereby increase demand for labor, promote structural changes, and stimulate real developmentvis-à-vis further industrialization. Furthermore, increased regional trade could provide buffers against macroeconomic cyclesand the associated commodity price swings that have major impacts on SSA’s economies.
As a continent, however, Africa has very low levels of regional trade, with eighty percent of exports going to markets outside of Africa. Since the 1960s there have been numerous frameworks formed to facilitate and expand regional trade. And yet, few have been fully implemented. Today, economic integration remains weak. Without reform, tariff barriers (like those against agricultural products that prevent food-deficit countries from purchasing food from their neighbors) and non-tariff barriers (such as SSA’s long customs delays at borders) will continue to stifle trade. While some progress has been made toward reducing tariffs on intra-Africa trade, non-tariff barriers remain a problem in many parts of SSA, including Kenya, Uganda, and Nigeria.
While liberalizing intra-African trade has high potential to generate economic growth, the fact that it has seen only gradual progress in many places should give policymakers pause. The important question is not whether liberalization should be promoted, but why political and economic structures have continued to resist such change. Does protectionism stem from a genuine concern for incomes of smallholder farmers? Or do political elites perceive the short-term pain of the adjustment period as a potential threat to their position? Does the government oppose integration primarily due to its fear of losing tariff revenues as a key source of income, such as in Ethiopia? Or are elites simply fearful of the emergence of an empowered and growing middle class that could demand political and economic inclusion, including the sharing of natural resource wealth? Once policymakers in the international community can answer why these widely accepted ideas have not gained traction with economic and political elites in a specific country, they can use levers and incentives on vested interests to ease elite concerns and ensure their positive participation in their country’s development.
Support for further integrating SSA’s markets is widespread, and there are currently at least two major initiatives for exploring the expansion of intra-African trade (TFTA and CFTA). However, these initiatives are unlikely to succeed if they fail to appropriately offer incentives to entice the political and economic elites to dismantle barriers.
For all types of international engagement in SSA countries, including in expanding intra-African trade, it is imperative for members of the international community working to broaden the base of beneficiaries of economic growth and promote citizen-led institutional change to thoroughly analyze a country’s political economy in order to locate leverage. Neglecting such analyses will likely result in the continued application of ineffective “one size fits all” policies that ignore institutional idiosyncrasies and entrenched interests of the elite. Without this perspective the international community is unlikely to succeed in formulating policies that support broadened economic benefit and promote institutional change in SSA.
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This piece is part of The Fletcher Forum of World Affairs’ 2014 Global Risk Forum. The Global Risk Forum is an effort to convene conversations around some of the most pressing issues we face as a global community in the year ahead: the breakdown of climate change negotiations; the spread of sectarian violence in the Middle East; the credit crisis and economic slowdown in China; the growth of cyber espionage; and the unraveling of Africa’s economic boom. We encourage you to read the conversations, participate with written responses or on social media, and help us work together to produce constructive ideas that will reduce the aggregate risks we face.
About the Author
Brian Kurbis is a Master of Arts in Law and Diplomacy (MALD) candidate at The Fletcher School where he is studying International Economics and Business. Prior to Fletcher, Brian spent seven years managing and supporting international humanitarian and development projects in multiple sub-Saharan African countries.