Africa needs trade not aid. This has been the reverberating message from many African leaders, economists and business pioneers of late. At this September's UN General Assembly, Ghanaian President John Dramani Mahama and Senegalese President Macky Sail addressed world leaders with this very sentiment.
The emphasis on trade over aid is in part a backlash against the modest results of development aid. Africa has received over $1 trillion in international aid over the past 50 years, but this has been ineffective in combating poverty and spurring economic growth in a sustainable way. Moreover, aid inefficiencies are acutely heightened where there is a lack of strong political institutions, a common difficulty across the continent. In contrast, there is a proven link between openness to trade and economic performance, an approach that has taken centre stage in the trade policies of the EU, Africa's second largest trading partner after China.
Towards a reciprocal relationship
The embodiment of the shift towards trade can be seen within the context of the Economic Partnership Agreements (EPAs) between a number of African groupings (Central Africa, Eastern and Southern Africa, East African Community, Southern African Development Community and West Africa) and the EU. Essentially, the EU wants to move towards a reciprocal trading relationship with the continent, in which African regional groups gain duty- and quota-free access to the EU market. In return, over time, participating African countries will have to liberalise just 83% of their markets, as sensitive products will be protected. For example, the Economic Community of West African States (ECOWAS) has excluded from eventual liberalisation all products that currently face the...