Africans, especially those entrusted with the leadership of the African continent, should look back into history, to evaluate the disadvantaged position Africa holds in today’s globalising world, and to be sufficiently agitated to design and work for a better future for the continent and its future generations.

The September 2005 issue of National Geographic carried, on a white background, the words “Africa:  Whatever you thought, think again.” I believe that if we want a better future for our continent, we Africans need to think again. We should be informed by a Chinese proverb that says, “A closed mind is like a closed book; just a block of wood.”  Let us open our minds; and let us be sufficiently agitated to change Africa.

The first major exploitation, denigration and humiliation of Africa was the slave trade that lasted almost 500 years.  The second was colonialism (going way back before the Berlin Conference of 1884-85) which prepared Africa for the third major phase of exploitation, denigration and humiliation that globalisation now threatens to be.

Just before and during the Berlin Conference (between 1880 and 1885) Jules Ferry, twice Prime Minister of France in a speech to the French Chamber of Deputies on 28 March 1884, justified and defended the then French colonial policy.  He said, “The policy of colonial expansion is a political and economic system…that can be connected to three sets of ideas:  economic ideas; the most far-reaching ideas of civilisation; and ideas of a political and patriotic sort.” In further justifying the civilisation aspect he added, “Gentlemen, we must speak more loudly and more honestly!  We must say openly that indeed the higher races have a right over the lower races…  I repeat that the superior races have a right because they have a duty.  They have the duty to civilise the inferior races…”

The economic ideas and foundation underpinning the then colonial policy still determine the extent and nature of Africa’s integration into the global economy—basically as a supplier of raw materials and extractive industry commodities, mostly unprocessed.  If we want a better future for our continent and its future generations, we must be sufficiently agitated to robustly fight the manifestly unjust economic relations in a globalising world. 

The colonial era’s so-called far-reaching ideas of civilisation translate into what we now call “the cultural dimension of globalisation,” where, among other things, Western (mostly American) cultural values and ways of life predominate.  They are fanned by global interconnectedness through migration and the Information and Communication Technology revolution that beams them to our living rooms and our computer screens.

The colonisers’ ideas of a political and patriotic sort appear now as defence of national interests at all costs even if such interests unleash untold suffering on other people.  That is why it is said, with wry humour, that it is better to live as a cow in Europe getting at least USD 2 a day, than to subsist on less than USD 1 in sub-Saharan Africa as a human being.  If we want a better future for our continent and its future generations we must be sufficiently agitated to lead unrelenting initiatives to redress such an unfair global trade and economic regime

The two years I spent as Co-Chair of the World Commission on the Social Dimension of Globalisation convinced me that Africa is not only the greatest loser in a globalising world; it is also structurally and institutionally positioned to continue being the greatest loser unless African leaders and their citizens think again of the realities of our world, and how to break away from the systemic injustice and procedural unfairness that characterises our engagement with the outside world.

We have to fight our insignificance in world trade, for trade, in goods and services, is the currency of globalisation. It was once suggested from some quarters that African countries should be satisfied with aid, and in return agree not to participate in WTO talks.  The argument was that we were too insignificant as players in the global market, and a distraction when the big players talk!

The first problem with regard to trade is about size.  Africa’s share of global trade is hardly 2 per cent.  But it is not only about size, it is also about content.  Africa’s exports are largely primary, unprocessed commodities, which account for at least 66 per cent of total exports. Africa, therefore, bears the brunt of the fickleness of commodity market prices, frequently deteriorating terms of trade and erratic weather conditions.  We also suffer from the excessive appetite of the value adding and trading multinational corporations. The United Nations Conference on Trade and Development (UNCTAD) put this problem in the following terms:

“A major explanation for the poor economic performance of the region in the past two decades and a half is the significant loss of resources due to adverse terms of trade.  World Bank estimates suggest that the cumulative loss resulting from adverse terms of trade over a period of almost three decades (1970 – 1997) for African non-oil-exporting countries (excluding South Africa) amounted to 119 per cent of the combined GDP of these countries in 1977, 51 per cent of cumulative net resource flows, and 68 per cent of net resource transfers to the region...  Research carried out by UNCTAD indicates that if SSA terms of trade had remained at 1980 levels, the share of the subcontinent in world exports would have been double its current level…”

Tanzania produces excellent cashew nuts.  A farmer is lucky to be paid 0.5 United States cents for a whole kilogram of raw cashew nuts.  The final consumer price of a kilogram of processed cashew nuts is at least 50 times as much.  Who pockets the difference?  It is the Western processors up the value-adding chain.  Many people are fond of “Swiss” chocolates.  But, who remembers the poor farmer in Ivory Coast who, in backbreaking and hardly rewarding routine, grows the cocoa beans without which we cannot relish those fine “Swiss” chocolates?

The UNCTAD Report gives the example of coffee in this exploitative relationship.

“While African producers have incurred losses in foreign exchange earnings, traders and firms in the higher steps of the value chain have been reaping significant benefits.  According to the International Coffee Organization (ICO), for example, in the early 1990s earnings by coffee-producing countries (exports f.o.b.) were some US$ 10 – 12 billion, while the value of retail sales was about US$ 30 billion.  Today, the value of retail sales is US$ 70 billion, while producers receive only US$ 5.5 billion.”

And we have little flexibility to wrestle ourselves out of this grip of the multinationals that profit from our position of weakness.  What is worse, governments in rich countries—perhaps unintentionally—make it difficult for us to break free by charging us escalating tariffs when we try to process our agricultural products before exporting them.  I will give you two examples of how tariffs change when we attempt to process our agricultural products:

• Unprocessed coffee beans are charged a tariff of 7.3 per cent in the EU; 0.1 per cent in the USA; and 6 per cent in Japan.  Final processed coffee, on the other hand, draws a much higher tariff of 12.1 per cent in the EU; 10.1 per cent in the USA; and 18.8 per cent in Japan.

• Unprocessed cocoa attracts only 0.5 per cent tariff in the EU, and zero tariffs in both the USA and Japan.  Semi- processed cocoa is charged 9.7 per cent in the EU; 0.2 per cent in the USA; and 7 per cent in Japan.  If Africans try to sell final cocoa products, they are charged a prohibitive 30.6 per cent in the EU, 15.3 per cent in the USA and 21.7 per cent in Japan.

Add to this the monumental agricultural subsidies of over USD 300 billion each year that OECD countries give to their farming sector, and you realise how difficult it is for Africa, whose competitive advantage is in the agricultural sector, to benefit from the existing regime and process of globalisation.  Not only do they make it difficult for us to sell processed agricultural products to them; they also undermine the incomes of our farmers by dumping subsidised agricultural products from their countries into Africa. Research also shows that the share of African exports that are adversely affected by agricultural subsidies on similar products in other WTO member countries is very high.  While in Tanzania the figure is 68 per cent; in Benin and Mali it is 85 and 84 per cent respectively.

Two things are transparently necessary. First, Africa must strive harder to industrialise and venture into the service industry.  Without value addition we are doomed.  But, presently, I do not see us, as a continental organisation, going beyond words to strategy and action on this imperative.  We speak about these injustices in meetings and conferences, but we do not aggressively develop and implement the necessary strategies to deal with them as a continent.

Secondly, we must strive to change the direction of our trade.  We are too dependent on Europe and America as destinations of our exports.  The European Union alone accounts for 52 per cent of Africa’s exports.  The good political relations we have with Asia and Latin America are yet to translate into larger investment and trading opportunities. It is true Africa’s exports to Asia grew significantly in the 1990s.  But between 1999 and 2001, only 16 per cent of Africa’s export revenues came from Asia.

I believe we need to think afresh into this strategy to ensure that we trade more with Asia and Latin America as a deliberate continental strategy to diversify our export markets and sources of investment.  It is important to bear in mind that Asian markets have more complementarity with the existing supply base of traditional primary commodities that characterise our exports.  The scope of value-added processing in Africa is still limited but by taking advantage of linkages with Asia, African producers and exporters could significantly benefit from expansion of traditional primary commodities.

Relations between Africa and Asia have to move increasingly beyond trade, to include trade-related investments of which there are three categories:

1. Investment targeted to produce in Africa consumer goods for the Asian market. These include processing natural resources and food products;

2. Investment targeted to produce in Africa consumer goods for Western markets, especially those that offer preferential terms to African exports, such as EU’s Everything But Arms, and the USA’s AGOA; and

3. Investment targeted at import substitution in Africa by supplying the African domestic and regional markets with locally produced quality products.

Effective regional integration and adequate regional infrastructure are necessary to facilitate these kinds of investments.  Intraregional integration will provide a minimum market size to capture economies of scale and attract Asian investments. It will be more effective to first concentrate on smaller, more efficient, Regional Economic Communities which will, when successful, constitute strong building blocs of an African Economic Community.  They will also make it possible to share experiences and best practices between the different communities.

Recent analyses in the context of Asia-Africa partnerships indicate the existence of a significant potential for expanding trade and investment. In April 2005, developing countries convened in Bandung, Indonesia, to mark 50 years of the Bandung Spirit which was, then and now, to promote cooperation between Asia and Africa.  The main difference between the two Bandung conferences is that while in 1955 few of the participating countries were stable enough to ensure meaningful change, now things have changed following dramatic modernisation of Asian economies creating a basis for meaningful economic relationships.  At Bandung, the Indian Prime Minister, Manmohan Singh remarked, “When our continents include both major producers and consumers of energy, the framework within which we produce and consume energy is determined elsewhere…we must end this anomaly.”

The time has come for strategic trade that will take advantage of enormous natural resources in Africa and Asia, as well as the rapid development that has made East and South Asia major markets for manufacturers as well as primary commodities in which Africa has a competitive advantage. There is no reason why, with political will on both sides, countries such as China and India cannot be major markets for African producers, and Africa emerge as an important market for basic Asian manufactured goods, while, at the same time, African manufacturing capacity is being built with Asian investment.  I am glad to note that already China and India are major sources of investment in Africa.  In 2004, for instance, China invested about USD 900 million in Africa; and India is now a major source of Foreign Direct Investment in East Africa.

There are three crucial  things that  African and Asian governments  should address: First, Africa and Asia have to work together to build a knowledge base on Africa-Asia trade and investment relations.  Such a knowledge base should continuously be strengthened to facilitate the discovery of market opportunities between Africa and Asia and to better understand how the market works between the two regions. The knowledge base should also identify geographic and manmade constraints and other impediments to promoting trade and investment between the two regions. Asia and Africa should then work together to formulate effective measures to remove those constraints while improving connections to global supply chains;

Second, Africa and Asia will have to create an institutional arrangement to enhance strategic dialogue between them and to raise awareness about emerging opportunities among businesses in the two regions.  Building on existing frameworks such as the Tokyo International Conference on African Development and the China-African Cooperation Forum launched here in Addis Ababa should facilitate broad-based, consolidated policy dialogues between African and Asian countries—by both their governments and their businesses.  While exports to Asia account for 16 per cent of total African exports, they are no more than 2 per cent of the total imports by Asian countries.  Therefore, an institutional arrangement needs to be designed to avoid asymmetrical expectations.

Finally, African countries and international donors should renew their commitment to an enabling environment for cross-border business activities, which are essential engines for economic growth.  At the same time, coordination and consolidation of efforts dedicated to production capacity building within Africa is critically important in enabling African countries to respond to international business opportunities. I repeat:  Regional Economic Communities are the assured building blocs for fast-tracking African economic integration.

African leaders should think afresh about the place of our continent in a rapidly globalising world.  We suffered during the slave trade and the colonial period, which ushered us into a global trading regime, not as equal players but as appendages of metropolitan powers.  Now we find ourselves unprepared and incapacitated to play the role we envisage for ourselves as equal partners and players, and as beneficiaries. We must be prepared to strategize on how to break out of this institutional bondage that makes us almost irrelevant. We have to restructure the content and direction of our trade and investment, finding new innovative ways to enhance South-South cooperation, as a means to develop the capacity to relate as equal partners with countries of the North. We must not be laid back, waiting for civil society in rich countries to do all the agitation and campaigning. We must resolve to lead. Our fate largely depends on our own determination and action. In the same way that no-one owed us our political liberation, no-one to-day owes us our economic liberation.

The German poet, dramatist, novelist and scientist Goethe said:

“I have come to the frightening conclusion that I am the decisive element. It is my personal approach that creates the climate. It is my daily mood that makes the weather. I possess tremendous power to make life miserable or joyous. I can be a tool of torture or an instrument of inspiration; I can humiliate or humor, hurt or heal. In all situations, it is my response that decides whether a crisis is escalated or de-escalated, and a person is humanized or de-humanized. If we treat people as they are, we make them worse. If we treat people as they ought to be, we help them become what they are capable of becoming."

This is the exhortation for Africa’s firm ownership of its future that I want to leave you with.