Blog Detail

Effects of International Trade Policies on Africa’s Growth And Development

African nations, especially West Africa, have long struggled with controversial international trade policies. Though trade is undoubtedly a significant driver of economic development and advancement, there are many ways in which these global trade policies can disrupt Africa’s advancement.

One of the most significant challenges faced by West African nations is discriminatory trade agreements. Developed nations often force trade agreements on African countries that are unfair, and biased in their favor. These arrangements might require African nations to open up their markets to imports from developed nations while keeping up obstructions to exports from Africa. This can ultimately lead to an abundance of cheap purchases that subvert local industries, making it complex for African organizations to compete in the international market.

In addition to this, many developed nations also force high tariffs on imports from Africa, which further leads to complexities for African nations to access their markets. It eventually decreases the demand for African goods & services and can also restrict Africa’s ability to export. This is one of those reasons why small businesses opt for international trade finance services. Furthermore, developed nations often provide subsidies to their farmers which further cuts back the cost of their agricultural products. It ultimately becomes difficult for African farmers to survive in the global market, eliminating the competing abilities of African farmers.

The list doesn’t end here. Another issue that African nations face is rigid intellectual property rights rules & regulations that developed nations imposes on African countries. These laws can affect their ability to access new advancements and medicines, negatively limiting health & education in African nations, as well as restricting their ability to innovate & grow. 

Moreover, African nations frequently have restricted portrayal in global trade negotiations. It means their concerns & interest aren’t being presented effectively, resulting in trade policies that don’t provide any benefits to African countries or consider their specific needs and challenges.

Overall, these complexities can further make it difficult for African nations, especially those in West Africa to develop & foster through trade. In order to resolve these challenges, it is vital for African nations to work together and support equitable trade policies that aid in their economic growth and development. This way, Africa is more likely to position itself better to compete in the global market and gain viable economic growth and development.

Recommended Read: What Makes Trade Finance A Better Choice Than Legacy Banks?

Since it is vital for Africa to be engaged in these conversations in order to encourage a bilateral understanding and skip being undervalued. There are a variety of steps that African nations can initiate to get involved in international trade policy-making and utilize their growth and development.

Firstly, African nations can attempt to create strong associations with other developing nations. By operating together, these nations can leave an improved & better impact on global trade negotiations and fight for policies that are fair, and justified for all parties involved. Additionally, this can also assure that African nations’ interests are being effectively considered in global trade discussions.
Secondly, African nations can invest in creating their own capacity to negotiate trade agreements. This might include putting resources in training and education programs for trade mediators and establishing strong institutions that can effectively address Africa’s interest in global trade negotiations. This way, African nations are more likely to position themselves to negotiate fair trade agreements that aid their economic growth and development. 

Thirdly, African nations can strive for alternative trade agreements that don’t include developed nations. For example, Africa can build trade agreements with other developing nations, such as China and India, which might be more beneficial for their interests. By expanding their trade partnerships, African nations can decrease their dependence on developed countries and limit their vulnerability to unjustified trade practices. 

Last but not least, African nations can process towards building a stronger domestic economy that is less dependent on global trade. It may call for investing in infrastructure, education, and advancements to construct a more competitive and viable domestic economy. This way, African nations can eliminate their dependence on international trade and better support their economic destiny.

Find out - How Technology Can Help Global Trade Become More Efficient, Inclusive, and Equitable? 

To conclude, Africa’s participation in global trade policy-making is vital to ensure its growth and development. By creating strong associations, putting resources into capacity-building, seeking alternative trade agreements, and building a stronger domestic economy, African nations can put themselves in a better position to negotiate fair trade agreements that enhance their economic growth and development. This way, Africa can utilize the potential of international trade to get sustainable economic growth and development.