African Think Tanks Urge G20 Leaders to Break Down Trade Barriers

April 1, 2009 (Lagos, Nigeria and Accra, Ghana):

Leaders of G20 meeting in London on April 2nd 2009 have been urged to be committed to an open global economy and the rules-based multilateral trading system. Underlying this call is the growing economic pressures in developed and developing countries which is engendering erroneous policy demand for protectionism.

The Initiative for Public Policy Analysis (IPPA Nigeria) and IMANI Center for Policy and Education, (IMANI Ghana), have called on leaders of the G20 to prevent short term inward-looking policies and promote integration of developing countries into the global trade regime.

Whilst G20 members have previously committed to deepening trade integration, this has not been translated into action.  According to IPPA Nigeria and IMANI Ghana, in the second half of the year 2008, 17 out of the G20 countries implemented 47 measures that actually restricted cross border trade.  

IPPA Nigeria and IMANI Ghana contend that already, trade barriers erected in developed countries have reduced Africa’s trade volumes by over 30%. They maintain that current calls for protecting one’s turf in favour of creating local champions will further depress trade volumes and further push millions on the continent whose livelihoods depend on food exports into deep poverty.

“Protectionism is a fire-brigade approach to address this recession. The best it will achieve is to create a conducive atmosphere to be hijacked by vested interests and cronies while increasing prices for everyone, reducing choice and inviting retaliation from other nations,” said Thompson Ayodele Executive director of IPPA Nigeria and Franklin Cudjoe, executive director of IMANI Ghana.

Trade not Aid

As capital markets falter, with decrease investments in emerging markets and trade flows wither, Africa faces real challenges. Already there are indications that African leaders will be asking G20 leaders to honour their aid commitments to Africa and further request more financial assistance. This is capable of providing palliative measures in a short run.

“It is a misnomer for African leaders to request additional aid given the fact that the Western countries that give aid are bearing the brunt of the recession.  The current recession should afford Africa the opportunity to assert herself with the African Union calling on its members to build effective institutions that support growth and entrepreneurship.

African governments must agree to deepen intra-regional trade and be innovative about internal revenue generation through sensible taxation policies that rope in the large informal economy.  African governments must also adopt austere fiscal measures, aimed at eliminating waste in the public sector. It is reprehensible to continue creating and maintaining bloated and inefficient regional and national bureaucracies. Ghana’s expected rise in public sector expenditure from 65% in 2008 to nearly 70 percent of tax revenues and 12 percent of GDP in 2009 is clearly not a bold belt-tightening measure, nor is the rampant cases of grand corruption in Nigeria an encouragement for  decentralizing power and resources,”  Thompson Ayodele and Franklin Cudjoe said.

Thompson and Franklin say one of the routes out of the recession is for the G20 leaders to muster courage and commit to opening trade.  Else, as the wave of protectionism continues to surge, it will reverse the gains made through the multilateral trading regime, undermine growth and deepen poverty. Saying no to protectionism should be priority number one on the G20’s menu list, instead of the current fifth place it currently occupies.

IMANI  and IPPA  were this year named among Africa’s 25 most influential think tanks by Foreign Policy Magazine.  

For media enquiries, please contact Franklin Cudjoe on +233 244 638 178 or and Thompson Ayodele on +234 703 363 0628 or thompson @