{"id":8039,"date":"2021-04-10T15:30:13","date_gmt":"2021-04-10T15:30:13","guid":{"rendered":"https:\/\/www.africa-press.net\/uganda\/?p=8039"},"modified":"2021-04-10T15:26:43","modified_gmt":"2021-04-10T15:26:43","slug":"africas-trade-revolution-needs-peace","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/uganda\/all-news\/africas-trade-revolution-needs-peace","title":{"rendered":"Africa\u2019s trade revolution needs peace"},"content":{"rendered":"

Africa-Press<\/a> – Uganda<\/a>. <\/strong><\/span>Despite Africa\u2019s conflict-related deaths rising from 2,200 in 2010 to an average of 14,000 per year since 2014, economic experts say a peaceful continent would enhance trade and sustained long-term investment.<\/p>\n

The African Continental Free Trade Area (AfCFTA), which came into effect in January, could be a game changer in helping to lift the continent out of poverty and onto the path of long-term prosperity. The AfCFTA has the potential to accelerate and alter the composition of foreign direct investment in Africa, thereby diversifying the continent\u2019s sources of growth and boosting its internal and external trade. And merging Africa\u2019s relatively small markets hence enabling investors to capitalise on greater economies of scale.<\/p>\n

But Africa risks squandering this huge opportunity unless its leaders can address the continent\u2019s unwelcome reputation as one of the world\u2019s most conflict-prone regions. According to the World Bank, nine African countries suffer from high institutional and social fragility; 12 are engaged in medium or high-intensity conflicts. Unsurprisingly, the number of conflict-related deaths in the region has surged from 2,200 in 2010 to an average of 14,000 per year since 2014. Transnational terrorist networks have recently intensified the problem.Besides causing untimely deaths and suffering, and destroying infrastructure, conflicts impede economic activity and undermine formal and informal cross-border trade. Informal trade between Mali and Algeria, for example, has fallen by more than 64 per cent since 2011, largely owing to the conflict in northern Mali and the closure of the two countries\u2019 border.<\/p>\n

The negative impact of wars on trade can be long-lasting. Globally, violent conflict is estimated to cause a 26 per cent reduction in exports in the year that hostilities begin, rising to 35 per cent five years later and 58 per cent after a decade. Across Africa, where the median duration of conflict is about four years, the negative spillovers of wars on trade could persist in the medium and long term.<\/p>\n

Author: Mr Hippolyte Fofack<\/p>\n

High-intensity conflicts also hinder trade and economic integration indirectly by triggering a sharp rise in military expenditures. African military spending grew by 17 per cent over the last decade, to $41.2 billion (Shs150.8 trillion) in 2019, according to the Stockholm International Peace Research Institute. In a region where large government financing gaps already inhibit investment in productivity-enhancing infrastructure, this diversion of scarce resources can have a significant adverse long-term impact on economic development, because it undermines the diversification of sources of growth needed to alleviate supply-side constraints and to align domestic production and demand.<\/p>\n

In recent years, especially in the Sahel, governments have shifted their resource allocation markedly from development to security. While that swing can be explained by the frequency of high-intensity conflict, sluggish development can itself stir up grievances that undermine security. The subordination of development goals to short-term security considerations also fuels corruption, which in turn drives horizontal inequality and intensifies resentment, creating conditions in which conflict and deprivation lock countries into a downward spiral of intergenerational poverty.<\/p>\n

Most would attribute China\u2019s four decades of rapid growth and poverty reduction primarily to successful economic reforms, but these achievements can also be viewed as the dividends of a peaceful and secure domestic environment. Likewise, Ethiopia\u2019s strong economic growth since the mid-2000s has shown that mutually reinforcing defence and development objectives in Africa can attract both domestic and foreign private capital, helping to overcome the supply-side constraints that currently dog many of the region\u2019s economies.<\/p>\n

One great benefit of a more peaceful Africa would be increased continental trade, which currently accounts for only 15 per cent of the region\u2019s total trade and is dominated by scarce manufactured goods, owing to most countries\u2019 continuing dependence on commodity exports. In addition, sustained long-term investment will accelerate the diversification of sources of growth and trade to mitigate the risk of recurrent balance-of-payments crises associated with commodity-price cycles.<\/p>\n

Ugandan soldiers train to fight piracy in 2018. PHOTO\/NMG<\/p>\n

The AfCFTA\u2019s success in deepening African economic integration thus hinges on creating the right conditions for long-term security. Only lasting peace will guarantee lasting prosperity. If policymakers can complement economic and democratic governance reforms with similar improvements to the judicial system and security sector, emphasising accountability and the protection of citizens, then the dividends in terms of conflict prevention will be even higher.<\/p>\n

Encouragingly, a growing number of African countries are settling their political differences through diplomacy and the rule of law, not the barrel of a gun. Some judiciaries have been greatly empowered and are increasingly exercising their independence. One noteworthy example was the decision by Malawi\u2019s Constitutional Court to annul the result of the country\u2019s 2019 presidential election in light of substantial poll irregularities; the rerun in June 2020 resulted in a victory for the Opposition candidate.<\/p>\n

Governance reforms are also likely to have positive spillover effects for Africa\u2019s institutional stability and regional integration. Although integration is, at its core, a political project, its success is contingent on policymakers recognising that the process is too important to be politicised. Greater institutional stability and predictability will curtail the risk of disruption to and discontinuity in regional integration during political transitions.\u201cThere will be no development without security and no security without development,\u201d the late, great former United Nations Secretary-General and Nobel Peace Prize winner Kofi Annan once said. \u201cAnd both development and security also depend on respect for human rights and the rule of law.\u201d<\/p>\n

Rebalancing Africa\u2019s security and development objectives is a daunting task. But it is one the region\u2019s leaders must seize with both hands in order to realize the AfCFTA\u2019s enormous potential.Hippolyte Fofack is chief economist of the African Export-Import Bank (Afreximbank).<\/p>\n

By Hippolyte Fofack<\/b><\/p>\n

Copyright: Project Syndicate, 2021.<\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Uganda. Despite Africa\u2019s conflict-related deaths rising from 2,200 in 2010 to an average of 14,000 per year since 2014, economic experts say a peaceful continent would enhance trade and sustained long-term investment. The African Continental Free Trade Area (AfCFTA), which came into effect in January, could be a game changer in helping to […]<\/p>\n","protected":false},"author":84,"featured_media":8038,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,8],"tags":[233,240,234],"class_list":["post-8039","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","tag-africa-press","tag-africa-press-uganda","tag-uganda"],"yoast_head":"\nAfrica\u2019s trade revolution needs peace - Uganda<\/title>\n<meta name=\"description\" content=\"Despite Africa\u2019s conflict-related deaths rising from 2,200 in 2010 to an average of 14,000 per year since 2014, economic ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/uganda\/all-news\/africas-trade-revolution-needs-peace\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Africa\u2019s trade revolution needs peace\" \/>\n<meta property=\"og:description\" content=\"Despite Africa\u2019s conflict-related deaths rising from 2,200 in 2010 to an average of 14,000 per year since 2014, economic ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/uganda\/all-news\/africas-trade-revolution-needs-peace\" \/>\n<meta property=\"og:site_name\" content=\"Uganda\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2021-04-10T15:30:13+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/uganda\/sites\/34\/2021\/04\/img-6071c381b31a6.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"720\" \/>\n\t<meta property=\"og:image:height\" content=\"480\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/africas-trade-revolution-needs-peace#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/africas-trade-revolution-needs-peace\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Africa\u2019s trade revolution needs peace\",\"datePublished\":\"2021-04-10T15:30:13+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/africas-trade-revolution-needs-peace\"},\"wordCount\":944,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/africas-trade-revolution-needs-peace#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/uganda\/sites\/34\/2021\/04\/img-6071c381b31a6.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Uganda\",\"uganda\"],\"articleSection\":[\"all news\",\"economy\",\"homepage-english\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/uganda\/all-news\/africas-trade-revolution-needs-peace#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/africas-trade-revolution-needs-peace\",\"url\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/africas-trade-revolution-needs-peace\",\"name\":\"Africa\u2019s trade revolution needs peace - 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