Africa needs its own cartels
The West is not, out of altruism, going to reverse the system of trade that impoverishes Africa. It is Africa that must fight politically to force the change. Why hasn’t it been done before now? The answer is that African governments have, in the past, been short-sighted and self-centred to a degree that borders on stupidity.
The West’s trade stranglehold is considered by most of us to be murderous and immoral.
Our governments may speak to the West in polite, diplomatic terms. But Africans who know the true causes of their continent’s poverty consider the West to be part of the problem.
African countries must band together and form cartels that lay aside money to acquire the means of adding value to their raw materials before export. Goods that are processed can better be held back from sale when prices are low. The Organisation of the Petroleum Exporting Countries (Opec) has proved that economic power comes through cartels.
Coffee is the second-most important commodity traded in the world—yielding first place only to oil. So if Africa could bite significantly into that market, it could earn enormous sums.
But at present Africa is a “price taker’‘, and the value of its exports is determined not by their final price in Western sales outlets, but by the initial price offered at the farm gate.
African governments have been fooled into becoming members of “alliances’’ of coffee and cocoa producers, and of “international organisations’’ ostensibly set up to “stabilise’’ commodity prices. All these bodies have failed in their tasks, but Africa shrinks from forming its own cartels to control commodity exports.
Before Opec flexed its muscles in the 1970s, petroleum was selling for les than $3 a barrel. Today, it is selling for $58. African governments must take a leaf out of the Opec book. They have already produced an economic programme called the New Economic Partnership for Africa’s Development (Nepad). But Nepad relies heavily on expected inflows of foreign investment, whereas foreign entrepreneurs cannot, by definition, be interested in what Africa really needs—namely, to vertically integrate the continent’s industries. Vertically integrated industries are not popular with foreign investors because they can be “nationalised’‘.
If Africa is able to accumulate enough capital to change its inherited production patterns and earn more from its products, these products will still be faced with punitive tariff walls. But the climate of opinion in the West is shifting against such practices, and it is up to African governments to enlist the support of the peoples of the West to force Western governments to dismantle such tariffs.
It is unrealistic to expect the G8 to act to meet Africa’s true needs, despite the pious noises we shall be hearing from Gleneagles. Only a real people-to-people message can meet the challenge.—Â