Walvis Bay — Primary commodity trap in Africa has at least three consequences, Economic Commission for Africa (ECA) Southern Africa regional director Said Adejumobi has observed.
Speaking at the official opening of the Ad-hoc Expert Group Meeting (AEGM) on the theme "Promoting Growth and Economic Transformation in Southern Africa: The Challenges and Implications of Declining Commodity Prices" Mr Adejumobi observed that firstly, the primary commodity trap which Africa finds itself has exposes the economic trepidations and vulnerabilities of African economies and the weak structural foundations on which they are constructed.
Mr Adejumobi added that secondly, it reinforces Africa's role in the skewed international economic regime, which is characterised by gross inequality and domination. "It is a system in which Africa largely produces what it does not consume and consumes what it does not produce" he said. He also observed that the global system limits opportunities and perpetuates poverty in many developing countries including Africa.
And, thirdly, Mr. Adejumobi observed that as revenue dwindles from primary products, foreign debt has intensified. "Foreign debt as percentage of GDP has risen significantly in many African countries", he added.
"As we set new dreams and aspirations for the World and the Continent with Agenda 2030 and Agenda 2063, our major goal should be how to reset the global economic regime" he said. Mr Adejumobi recommended that this required that Africa and indeed, Southern Africa moves up in the production value chain either in the agricultural, industrial or service sector. He explained that "creating expanded markets through market integration without commensurate production expansion will only lead to "market capture", capital outflow and deepening underdevelopment".
Meanwhile, Chief Executive Officer of the Walvis Bay Corridor Group (WBCG), Mr Johny Smith, acknowledged the partnership with the African Trade Policy Centre (ATPC) spanning more than 10 years. He noted that Africa best practices models such as the corridor development model could be used for other sectors of economies in the subregion.
And speaking at the same meeting, the Director of the Macroeconomic Policy Division of ECA, Mr Adam B. Elhiraika, noted that Industrialization and Structural Transformation are some of thematic areas of research at ECA. In his presentation entitled "Commodity Prices and Africa's Growth and Structural Transformation", Mr Elhiraika highlighted ECA work in 2011 on the role of the State in governing development in Africa and other work on industrialization including the one on commodity based industrialization which he said are published on the ECA website.
Participants at the meeting will review the report on "Promoting Growth and Economic Transformation in Southern Africa: The Challenges and Implications of Declining Commodity Prices" and provide recommendations to improve the draft.
The meeting is organized by Economic Commission for Africa (ECA) Southern Africa in collaboration with The Walvis Bay Corridor Group (WBCG). In attendance are experts in the areas of development economics, international development, trade and regional integration, academia, government, regional economic communities, development partners, private sector and civil society.
