The World Bank has expressed concern over the low level of trade among countries in Africa, even as it described the situation as a ‘self inflicted wound.’
The Washington-based institution insisted that improving trade among nations in the continent would bring about increased revenue generation and growth for nations in the continent.
World Bank Director of Poverty Reduction and Economic Management, Africa Region, Mr. Marcelo Giugale, said this in an interview with journalists in Lagos at the weekend
He said: “Africa has been very successful in integrating itself with the rest of the world, but it has not been successful in integrating countries in the continent. The commodity trade has made Africa to integrate with virtually every region of the world, but in terms of trade among countries in the continent, Africa has really failed.
“The fragmentation of Africa in terms of trade is dramatic and is resulting in the loss of billion of dollars of Gross Domestic Products (GDP) and million of jobs that ought to have been created.
“This is a self-inflicted wound. As you can see, agricultural trade among Africa countries is yet to start. That is one sector that will generate a lot of employment and a lot of social input.”
World Bank Country Director, Nigeria, Mrs. Marie-Françoise Marie-Nelly, in her contribution, called for the implementation of the treaty on the movement of goods in the continent. “Also, I think there is need for the integration of industries in the continent so as to produce goods that can complement each other,” she added.
Continuing, Giugale advised policy-makers in Africa to remove barriers to trade in various economies in the continent. He also gave the example of agriculture, which according to him, had been largely left for millions of poor African substantial farmers.
The World Bank official also pointed out that although the continent may have recorded positive growth rates in recent times, such growth rates are not enough to take the continent’s growing population out of poverty
“It is not enough to reduce poverty. We have specific targets that are in reach. Child mortality has fallen fast in many countries. But at the same time, poverty is going down very slowly.
“You certainly need much more than the GDP numbers going up. The translation from growth to employment is complex as it depends on labour market, skills, infrastructure and quality of the business environment. Growth can be very fast and you still don’t see poverty reducing. Also, growth is a necessary, but not sufficient condition that poverty will fall,” Giugale said.
He also argued that when high inflation rate is accompanied by growth, as it has been observed in some Africa countries, the impact on poverty would be severe.
“We have underestimated the ability of the service sector to generate growth. Many African countries are too dependent on commodities and so are not able to deliver employment. Not many countries have translated fast growth into fast employment creation,” Giugale added.