Africa’s Free Trade Bloc Is An Excellent Idea


Varied African states – essentially all that are still states other than Nigeria and South Africa – has joined up into a trade bloc. Of course, it’ll matter how the details turn out but there’s great good sense in their trying to create something like a common market among themselves. For what is all too often underappreciated is that trade between places at roughly the same level of technology is just as good at increasing economic wealth as any other form of it:

The two biggest economies in Africa, Nigeria and South Africa, were wednesday conspicuously absent as 44 leaders of African countries signed a deal to create one of the world’s largest free trade blocs.

The billion odd people of China are richer because there is free trade between those billion. The billion odd people of Africa would be equally richer for the same reason – free trade between a billion people.

Note that it’s not necessary that trade be on the sort of terms Africa has had these recent decades. Being an exporter of raw materials and commodities and importing manufactures. Sure, that’s nice, people get manufactures and so on. But to get growth motoring it’s necessary for there to be domestic production of something that adds value. Which means producing something higher up the value chain than simply raw commodities.

The problem in near all African countries being that the domestic market is simply too small to support someone doing anything at world levels of productivity. Which poses something of a problem really, doesn’t it? Not up to world standards production and yet not a large enough market to get there either. The answer being to start dividing and specialising the various production tasks among those nations which all share that same problem. Free trade between African countries therefore.

This trade stuff really isn’t difficult. Trade makes people richer, the more trade there is the richer the people get. Thus anything, any arrangement, which increases trade by reducing the barriers to it is a good idea.

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