EU Back Pedals on Farm Subsidies; Are Subsidies Alone Holding Africa’s Progress?

Thursday, July 17, 2008

AU EUOpponents of European Union Economic Partnership Agreements (EPA) say these would allow cheap imports and send the already tottering African economies into collapse. They ignore the consumers who would benefit from cheap imports or the producers who could export regionally and internationally: they think only of maintaining government power and protected industries.

But the real consequence of these anti-development policies is to keep the African farmer at subsistence level and keep our economies agrarian. Tariffs in rich countries have fallen by 84% in the last two decades to about 3.9%, yet tariff barriers in Africa have only declined by 20% to a still massive average of 17.7%. Of course, other, non-tariff, protectionism in the poorest African countries is four times greater than in rich countries.

Isn’t there a rich history of free trade within Africa? At the height of their glory, many pre-colonial African states and empires found trade to be a better way to prosperity than through conquests. Gold was shipped from Wangara in the Upper Niger across the Sahara desert to Taghaza, in Western Sahara, in exchange for salt, and to Egypt for ceramics, silks and other Asian and European goods. The old Ghana empire controlled much of the trans-Sahara trade in copper and ivory. At Great Zimbabwe gold was traded for Chinese pottery and glass. From Nigeria, leather and iron goods were traded throughout West Africa.

Today, Africa has lost that trade and many conspiracy theories abound for its backwardness. But the blame game ignores the devil within: the internal and regional barriers that hobble trade, making tariffs within Africa far higher than any tariff barriers by outside blocs . There are even politicians, bureaucrats and many aid activists who argue that these tariffs make essential contributions to government revenue–meaning government offices are more valuable than citizens or the economy.