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Defragmenting Africa

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The scene repeats itself daily. At a remote border crossing between two east African countries, a woman carrying an impossibly-heavy load of eggs on her back is harassed -- or worse -- by custom officials. She arrived on foot, and the eggs are the produce from her meager farm miles away. Selling them in the neighboring country is her only chance at making a living. But either she pays the officials or she won't be let through. She pays -- price: one egg. A few yards ahead, she is stopped again. And then again. By the time she gets to the market on the other side of the border, her load is forty eggs lighter. Her profit is all but gone. Since there is no other way -- literally -- to reach her clients, she will go through this all over again in a few weeks. Funny, these two countries belong to a "customs union," a treaty that has supposedly made commerce between them seamless and duty-free. Welcome to the mind-boggling cobweb of obstacles that make Africa unable to trade with itself. [By the way, if you are interested, there is a superb video-documentary where you can hear this and other similar stories told by the actual victims.]

Now multiply the scene by hundreds of thousands of poor farmers across hundreds of thousands of miles of borders and you will understand why Africa routinely fails to feed its people. "Food-surplus" countries just can't send their excess to "food-deficit" ones. And what is true for grains, vegetables and meats, is also true for engineers, doctors and nurses. The trade in professional services -- in fact, any service -- faces the same type of "non-tariff" barriers, a code-word for the dozens of bureaucratic permits that make it impossible to enter a market. Ask yourself why Ghanaian accountants -- who are said to be pretty good and in large supply -- cannot work in other West African countries that are short on bookkeepers. Or why there are so many unemployed teachers in Kenya while, just to its south, Tanzania has a shortage of them? How about trucking licenses that are not valid once you cross a frontier? Or telephone and banking services? Wherever you look, African markets are fragmented, that is, you cannot move your products from one market to another. The end result is that Africa has integrated with the rest of the world -- mostly selling commodities like oil, minerals or cocoa -- faster than with itself.

The unfortunate thing is that fragmentation is costing the region billions of dollar and millions of jobs. At a time when the traditional markets of Europe and North America are stagnating, blocking intra-Africa trade seems like a self-inflicted wound. It aborts the type of "cross-border production network" that helped make East Asia the powerhouse it is -- a final product is assembled from intermediate parts that are manufactured wherever it is cheapest. It makes it more difficult to diversify Africa's export base beyond commodities. And it is plainly unfair: it keeps the poor, especially poor women, from earning a living in activities where they have an advantage -- like catering for smaller, local markets across the border.

How do you fix this? A just-published book makes a strong case that the solution is not about presidential summits where free-trade agreements between countries are signed -- good as those may be. It is not even about changing laws and regulations within each country -- although some of those may need changing. The real question is about vested interests, something economists elegantly call "political economy." How come institutions, like customs agencies, that are ordered to keep trade flowing free, just don't -- or even do the opposite? Who are they protecting? Who protects them? That's the real question. And it has no easy answers.

There is hope, though. Multinational action is beginning to bear fruit. Mutual recognition of some certifications is allowing a trickle of professionals to try their luck abroad but within Africa -- if you travel the continent enough, you soon learn to recognize those brave South African agronomists helping raise crop yields in far-away farms. And each time famine strikes in one area, the light of enraged public opinion is shed over the inventories of food sitting idle in another. [NB: nothing promotes intra-regional food trade faster than charities and development agencies buying their food donations for Africa within Africa.]

But what will really drive change is that Africans are getting tired of this self-imposed isolation -- wouldn't you, if, say, a bag of cement in your country cost three times more than in the country next door, just because your government wants to protect a local cement company -- and its private owner? Sure, trade within Africa won't become truly free overnight. It took Europe some fifty years to come together as a "single market." And, with 48 nation-states south of the Sahara, there will always be a few that refuse to join economic hands. As democracy takes hold, however, more and louder voices will be heard against internal barriers. In the end, those ladies with the eggs on their backs will carry the day.

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