Policies of WTO and its Effect on African Economy

Policies of WTO and its Effect on African Economy

Introduction

Third world African countries, having entered into free trade agreements with Western nations following WTO policies, in the expectation of securing greater opportunities for their exporters, complain that these agreements are being ignored or circumvented in the West. Trade barriers, although reduced on paper, continue to protect important products such as textiles and agricultural products in the Western markets. The figures on developing nations' exports are not encouraging. This creates a conflict of interest among African developing countries and West. Although, the ignorance of WTO policies which mainly provide protection for developed nations has affected the growth of the developing countries of African continent.

History of African Economy

Economically Africa is the poorest continent in the world. The gross domestic product (GDP) of Africa in 2008 is 1,621 billion U.S. dollars or 2.62% of global GDP which in 2008 was estimated to 62,250 billion U.S. dollars, or the equivalent of the GDP of Canada for that year. On average GDP per capita of Africa is $1,636 while the average world outside Africa is at $10,460 per capita. In 2008, according to the official exchange rates, the country with the largest GDP of the continent is South Africa with 300.4 billion dollars and the country with the largest per capita GDP is in Equatorial Guinea with 31.848 dollars. In 2007, Libya was the most developed country in Africa, if one refers to the ranking of HDI (Human Development Index) established by the United Nations Development Programme (UNDP).

Before the Roman Empire, the ancient Egyptian civilization was one of the most prosperous and the most advanced in the world. The port of Alexandria, founded by Alexander the Great in the 334 BC, was a hub of commerce in the Mediterranean for centuries. The conditions were different in the south of Sahara, where the density of forests and deserts formed as barriers to trade. Only Nubia, Ethiopia, Maliand and Ghana have means of communication to the Mediterranean and the Middle East. Throughout the first millennium, the kingdom of Aksum dominated the Horn of Africa. He had a navy and traded with the Byzantine Empire, the India and perhaps China. The introduction of the camel by the Arabs in the 10th century made possible the crossing of the Sahara. Revenue from the gold and salt allowed the emergence of many powerful empires in western Sahel, including Ghana, the Mali and Kanem-Bornu kingdom. The Arabs also developed maritime trade along the east coast, where the Swahili civilization flourished through the export of ivory and slaves across the Indian Ocean. Further south, the traces of empires or kingdoms traders are much rarer, with the exception of Great Zimbabwe and the region of the Great Lakes, Rwanda, and the Burundi and Buganda.

In the 15th century, Portuguese merchants freed themselves from the routes of the Sahara to reach directly Guinea by sea European nations followed and West Africa, get rich quick.  Decentralized federations of city-states were common, such as those of the Yoruba and Hausa, based mainly on the slave trade with Europe, this prosperity collapsed with the abolition of slavery in the American colonies.

Africa is considered to have an extremely rich and resourceful land. It contains a rich diversity of natural resources, including 30% of all minerals in the world with 40% gold, 60% cobalt and 90% of platinum in the world. This is only partly true because its resources are ...