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The Financial Crisis: An Opportunity To Develop Intra-African Trade and Break Free
Dr. Bienvenu-Magloire Quenum
International trading pattern in Africa is North South oriented. Imported goods (machinery, heavy equipment, hard and soft commodities) and services (insurance, shipping and expertise fees and commissions are exchanged North-South, more than South-South (between African countries themselves.) That is a known fact. No need to show figures and graphs.
The pattern had been set during the colonial era and the trend persisted since mid 1950s when formal independence where "granted" to British and French colonies in Africa.
The trend is based on the fact that cash crops commodities (coffee, cocoa, cotton, tea to name the few) and mineral resources were shipped bulk to developed countries to be processed and sent back to African countries are value added goods, transported by shipping lines owned by Northern countries companies.
And of course, purchasing prices of African goods were determined by institutions based in developed countries at level upon which the African decision makers have no say. Idem for the pricing of the manufactured goods sent back to African countries and services related (shipping freight and insurance costs.) Several studies had been dedicated to the matter, but the most comprehensive one had been published by Walter Rodney [1, 2] in How Europe Underdeveloped Africa. In a nutshell, Walter Rodney performed a surgical
analysis of the economic and political mechanisms engineered
and carried out by the Europeans, over five centuries, to appropriating and “sucking” the
economic surplus (fruit of African labour and resources). He completely exposed
the pattern of domination, and indicates to African policy-makers the roadblocks
and traps to overcome to reversing the trend. A must have book for African decision-makers.
- The Time Come To Reverse The Trend
Now, with this "boiling" financial crisis, the times come for developing nations and African countries in particular to reverse the trend and "dispatch" the North-North trading pattern and resolutely engage in a South-South trading pattern. Of course, this does not means stop trading with the North, but to focus on intra-African trading to exchange goods and services.
African countries will continue to buy equipment and industrial plants and tools from the North, but soft commodities
trading should be increased among themselves. That is increase the exchange volumes of cereals, fruits, roots and tubers and related processed and manufactured food stuffs between African nations.
Some people are speaking of lowering customs barriers and tariffs between African countries before implementing that revolution. That is not necessary. There is no time to waste and it is urgent to act. Decision-makers in each single African nation should act now and fast to implementing national developing schemes that put emphasis on agricultural development and diversification and processing of resulting crops. Africabiz Online is advising that scenario since 11 years running.
African nations should act as strategic planners, taking stakes in national companies and corporations - in partnership with national private entrepreneurs and foreign investors.
Following the pattern set for us since three decades by developed nations, which advised our governments to stay clear of the developing process, and let free market and deregulation lead the show, would be suicidal. Some African governments had not yet got the picture and are still planning for the privatization of national assets, that boils down to selling hard established national assets to foreigners. They are heading for the wall.
That way of developing is dead with this financial crisis, as Free Trade's designers are themselves doing the contrary of what they impose upon us [3, 4]
Opportunities to Break Free Are Endless
Over 11 years, Africabiz Online demonstrated that untapped opportunities abound, which development would turn around the economy in African countries, generating double-digit annual growth rates, year in year out, to producing pharmaceuticals , cereals [30, 31, 32, 33], cassava flour , fresh meat and so on. And boosting intra-African trade of soft commodities and food stuffs to setting the continent free from the corseted North-South trading pattern that had "blocked" the developing of the continent.
About the author: Dr.
Bienvenu-Magloire Quenum is the principal/
managing director of Dr.
Quenum & Associates, IBC; an experienced Investment & Business
Planner with 30 years consulting practice in African countries;
author of Africans,
Stop Being Poor! and the editor in chief of Africabiz
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|MORE ON THE FINANCIAL CRISIS
|1- Financial Shock: A 360º Look at the Subprime Mortgage Implosion,
and How to Avoid the Next Financial Crisis
by Mark Zandi (Hardcover - Jul 19, 2008)
2- The New Paradigm for Financial Markets:
The Credit Crisis of 2008 and What It Means
by George Soros (Hardcover - May 5, 2008)
3- Manias, Panics, and Crashes:
A History of Financial Crises (Wiley Investment Classics)
by Charles P. Kindleberger, Robert Aliber, and Robert Solow (Paperback - Oct 4, 2005)
4- Chain of Blame:
How Wall Street Caused the Mortgage and Credit Crisis
by Paul Muolo and Mathew Padilla (Hardcover - Jul 8, 2008)
5- Understanding Financial Crises
(Clarendon Lectures in Finance)
by Franklin Allen and Douglas Gale (Hardcover - May 17, 2007)
6- The Subprime Solution:
How Today's Global Financial Crisis Happened, and What to Do about It
by Robert J. Shiller (Hardcover - Aug 24, 2008)
| 7- The Trillion Dollar Meltdown:
Easy Money, High Rollers, and the Great Credit Crash
by Charles R. Morris (Hardcover - Mar 3, 2008)
8- Empire of Debt:
The Rise of an Epic Financial Crisis
by William Bonner and Addison Wiggin (Paperback - Oct 6, 2006)
9- Financial Crisis, Contagion, and Containment:
From Asia to Argentina
by Padma Desai (Hardcover - April 21, 2003)
10- America's Financial Apocalypse:
How to Profit from the Next Great Depression
by Stathis (Paperback - Nov 14, 2006)
11- Crash Proof:
How to Profit From the Coming Economic Collapse (Lynn Sonberg Books)
by Peter D. Schiff and John Downes (Hardcover - Feb 26, 2007)
12- Bad Money:
Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
by Kevin Phillips (Hardcover - April 15, 2008)
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MISCELLANEOUS SERIES: - INTRODUCTION TO RENEWABLE ENERGY
Business opportunities exposed in Africabiz Online, which listing is here available, need energy supply. Unfortunately, in most African countries, energy/electricity supply is first fossil based, and, second, supply is erratic for lack of infrastructures or foreign currencies to purchasing gas oil. Worse, only cities are serviced on a sporadic basis, when rural areas are left in the dark.
That is a bad scenario as development of processing units are hampered and particularly the establishment of these units in rural areas.
There are alternative to solving the deadlock and boost the developing process. Several issues will be dedicated to the matter. To start with this one which is an overall brief introduction.
here to read more about the matter
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