Intra-African trade is increasingly in manufactured goods so a further opening of markets will give further impetus to this trend. Picture: THINKSTOCK
As industrialisation provoked urbanisation and then globalisation, high-poverty areas must now either add value to goods and services destined for high-income markets or contend with persistent poverty. Just as it became impossible for isolated rural communities to keep up a century ago, poverty alleviation is now tied to global trade.
Africa’s potential as a target market is overstated. Its population is more than 15% of the world’s and very young, and its share of global GDP is less than 3%. While several of the world’s fastest-growing economies are in Africa, this is also misleading as their per capita incomes aren’t on track to reach the global average this century.
These points are not abstract; they are as simple as engaging new possibilities while targeting prospective customers with significant purchasing power. SA doesn’t have the domestic purchasing power to curb its extreme volumes of unemployment and poverty. Nor is selling to poor neighbouring nations a workable option.
How exactly will this create jobs? As SA’s policymakers cannot envisage a detailed response, they instead embrace the outdated industrial fantasies of their political minders. Rather they should humbly resist pressure to identify innovations which can add fresh value to evolving global supply chains.
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