WTO: Some Gains and Losses for Africa. Will Nairobi be a game changer?

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The much anticipated 10th WTO Ministerial Conference kicks off today at KICC. Bringing the conference to Africa this year is a step in the right direction as the African states will feel they are part of the body that has been accused of neglecting the interests of the developing countries. Although there have been great reaps for Africa from WTO, it has not been as many people had anticipated. There have been losses as well on the part of Africa and below I have outlined some of the gains and losses for Africa so far.

The map of Africa. Image from https://www.1voiceafrica.com/blog/37-amazing-facts-you-never-knew-about-africa/
The map of Africa. Image from https://www.1voiceafrica.com/blog/37-amazing-facts-you-never-knew-about-africa/

GAINS

Trading partners for Africa

The African states have a wealth of natural resources such as oil and gold as well as agricultural products such as coffee, tea, and cocoa while the developed countries are known to have made technological strides such that they manufacture sophisticated devices that the African states have not been able to make. This therefore prompts the need for exchange of these products and services which creates the trading relationship. Member states particularly have better terms of trade where countries mutually benefit.

Financial support

The African states are yet to match the financial muscles of the developed countries thus they have to be boosted with financial support through donor funding, grants, loans and other developmental funds from bodies such as the IMF, World Bank. This financial support is important in the infrastructural development and initiating other projects that boost the economies of the less developed countries. This has however been a double edged sword.

Agricultural development

Agriculture in the African states is a major part of their GDP. Interaction of the WTO member states has provided a ready market for these agricultural products. Through agreements made between them, there have been exchange programs where farmers have benefited from better technology from the developed countries to cushion them against losses that could come about as a result of the erratic weather and the effects of climate change.

Poverty alleviation

Many Africa states joined this body with the aim of bettering people’s lives. This has been partly realized since the less developed countries have benefited from the developed states. This is a step towards poverty alleviation. For instance, creating markets for African products is an indirect way of employing people which in turn makes it possible for them to take care of their needs.

LOSSES

Competition at the global markets

African states are unable to compete at the global markets because of the disparity in development. Better developed countries have an upper hand when it comes to trading globally. African states have to comply with many regulations and there are many barriers to the entry in these markets.

Protectionist policies

The developed countries have policies that protect their intellectual property as well as ensuring that no substandard products or services find their way to their markets. This only makes it hard for the less developed countries to freely enter these markets. For instance, there have been many attempts to develop cures for the malicious HIV/AIDs from the African states but these countries do not have rules that protect the intellectual property. It ends up by taking up by the developed countries and the cure never sees the light of the day.

Cheap products to Africa

The developed countries export products to the African markets at lower costs than what is already in the market from the Africans. This increases competition and since the consumers always prefer the cheaper products, it only hurts the African markets. This is made possible by the absence of barriers to hinder these products from getting into the market.

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