Strategies for revitalization, recovery and growth of Africa's trade in the 1990s and beyond

Abstract

Since the 1970s, Africa's trade performance domestic, intra-African and international has been disappointing. A major cause for this is that in general, governments, international organizations and bilateral donors, in their investment and resource allocation programmes have accorded very low priority to the trade sector. Africa's share in world trade had been marginalized despite efforts to strengthen its bargaining position in international negotiations. Domestic trade had not kept pace with demand functions as indicated by serious shortages of food, essential commodities and services in many parts of Africa. Intra- African trade had declined from an average of about 6 per cent in the 1970s to about 4.5 per cent in the 1980s. Similarly, as a result of stagnation in its exports, Africa's share of world trade dropped from about 4 per cent to about 2 per cent between 1970 and 19B8. The prices of many agricultural and mineral primary commodities of export interest to Africa collapsed in 1981 to the lowest levels in 50 years. This was manifested in the uncertainties in export earnings, deteriorating terms of trade and fluctuations in the exchange rates of major world currencies to which many African national currencies were pegged. Recently, the situation was aggravated by the breakdown in the negotiations on international commodity agreements on primary commodities of interest to African countries.