Africa should shift focus on trade

• Pages: 1-14

Page 1

In recent decades, African countries have pursued a number regional trade arrangements, hoping this would give economic growth a boost. But the results have not lived up to expectations.

At an IMF-sponsored seminar in Dakar, ministers from Faso, Guinea, and Senegal and other participants, including Abdoulaye Bio-Tchané (right), debated whether the time come to focus instead on opening up to global trade.

Page 14

Have African regional trade pacts delivered on their promises?

Trade liberalization is often cited as a key ingredient in efforts to boost growth in Africa and reduce poverty. But are the growing number of regional trade arrangements helping?

A seminar on Trade and Regional Integration in Africa-held in Dakar on December 6 and sponsored by the IMF and the Central Bank ofWest African States (BCEAO)-took stock of these arrangements and debated what will be needed to increase trade and stimulate growth. Sanjeev Gupta,Assistant Director in the IMF's African Department, reports on the proceedings.

In recent decades, Africa has seen the creation of a number of regional trade arrangements, but questions are now being asked about whether these ambitious efforts are boosting trade and growth and deepening regional integration.Ministers from Burkina Faso, Guinea, and Senegal as well as representatives from African regional trade and monetary organizations joined with staff from the African Development Bank, the World Bank, UNIDO, and the IMF to evaluate the role of regional trade arrangements and chart future steps.

In opening remarks, Anne Krueger, First Deputy Managing Director of the IMF, noted that no country has been able to sustain rapid growth without opening up to international trade. She urged Africa to follow the example of fast-growing economies such as Chile and Korea that have pursued unilateral trade liberalization and reaped significant benefits-a point echoed by John Panzer of the World Bank in his presentation.

Costs and benefits

A number of seminar participants, including Djene Camara, Guinea's Minister of Commerce and Industry, echoed developing country concerns about the price tag attached to trade liberalization. Lost tariff revenues are a common fear, Krueger acknowledged, but experience suggests this is not the rule and strengthened domestic taxation can replace lost revenues. Paraschand Hurry of the Common...