Africa seems to have been ‘blessed’ with this curse called Resources. I am thinking of Nigeria, Gabon and Angola’s oil, Zambia’s copper, DRC’s numerous minerals, Ghana’s cocoa and many more too numerous to mention. Surely it is inconceivable to view a country’s natural resources in such negative light but when one looks at Africa this association is inevitable.

So what is the issue here? Or is it what are the issues here? Firstly what comes to mind is the question, what is the point of having resources when the wealth generated from these is not evenly distributed among citizens? Resources i.e. diamonds, oil have been identified as the cause of many wars in Africa. Depictions of these range from Hollywood movies like Blood Diamonds and media attention highlighted on issues regarding Child Labour and Child soldiers. Therein lies Africa’s problem with resources. With rare examples like Botswana. Where the diamond industry contributes a large percentage of the country’s GDP and the resulting wealth is reinvested in public goods and services that benefit the citizens of Botswana e.g a good education system, well functioning hospitals, sustainable welfare arrangements and of course an absence of internal strife in administering and redistributing Botswana’s mineral wealth.

Zambia’s problems on the other hand have to do with a mineral resource, Copper, whose price fluctuations have not been strategically planned for, that is one thing, the other is having in place a tax regime that is inadequate in terms of assisting Zambia generate healthy percentages and full revenue from the mining activities being conducted in the country by the mostly foreign investors. In short one could say, Zambia’s problems in this regard are institutional in nature i.e. weak taxation regime.

China is in Africa. Influencing the direction of Africa’s economies (for better or worse, only time will tell), building roads, infrastructure. Chinese businessmen are being given huge amounts of land in some of these countries, displacing the local people who owned these lands with very little or no compensation. Employment relations between Chinese employers and their African employees are problematic to say the least. This could be put to a clash of cultures or a new form of colonisation? Chilonisation?

A lot has been said about the Western world’s role in this ‘new’ dispensation of aggressive Chinese expansion in Africa. Some view it as a welcome change given the West’s own history in Africa, past colonisation and more recently endless Aid allocations that have largely not lifted the economies of Africa.

I believe the West still has a lot to offer. Yes the Chinese are building things but are they building capacity? The capacity to manage resources comes with knowledge, the knowledge to establish taxation regimes that assist African countries generate the millions of dollars in revenue they are currently loosing out on as a result of weak institutional structures. The culture of Corporate Social Responsibility, conducive labour relations based on mutual respect and dialogue, enacting Investment laws that woo outside investors but at the same time protect local businesses and industry. All these are valid areas of concern where mechanisms need to be harnessed and put in place to strengthen the capacity of African governments’ in being accountable to their citizens.

I just spent three exciting and eye opening weeks in Zambia, the country of my birth. I must say I was quite taken aback by the size and sheer volume of Chinese investment, especially in Zambia’s mining sector. Investment is a good thing one might argue, but the manner and character in which investment manifests itself sometimes gives food for thought.

I would argue that the type of Investment which aspires to stimulate private sector growth, contribute to sustainable economic development in local communities, is the ideal type of investment. This coupled with strong labour laws, fair investment laws that balance the interests of the investor, as well as that of local partners is what is needed in a developing economy like that of Zambia. Of course it is acknowledged that China’s presence in Africa has increased industrial growth rates across the continent and improved infrastructure BUT this is all coming at a price that might not be so favourable to Africa in the long term. For instance China’s policy of non interference in domestic issues on the Continent might seem very appealing to some selfish and corrupt leaders. This state of affairs is in effect ensuring that African governments postpone or choose to not prioritise important values such as entrenching strong democratic practices.

The challenge then is for countries like Zambia, to position themselves in such a way as to benefit from this inevitable relationship with China. ‘Positioning’ in this case would entail initiating strong investment laws that ensure that major contracts, instead of being awarded to purely Chinese firms, are awarded to home grown firms or at least businesses with a local majority shareholder. Strong labour laws that ensure, among other things, that the local population receives fair and adequate wages.

According to Bloomberg in the first nine months of 2009, China’s investment in Africa rose 77.5 percent approximately totalling $875 million. China has also signed labour service contracts in Africa worth $33 billion catering to the first 10 months of this year. Last year it completed contracts valued at $20.5 billion. With these large investments it is safe to conclude that China will be in Africa for a very long time and so it is imperative that Africa’s relationship with China graduates to one of true mutual benefit. The onus of course lays with African governments to explore ways in which their economies will prosper from this ‘strategic relationship’.

Remember the story of Pandora’s box in Greek Mythology? Well, When Pandora opened her box she let out all the evils of the world except one, Hope. It is recorded in history that the Greeks considered Hope to be an evil, but a necessary evil that had to accompany all the other troubles of the world so that humanity was not filled with despair and helplessness. Pandora then revisited her box and let out Hope.

The Nobel Peace Prize Committee has reminded all of us that Hope and Inspiration are virtues worth nurturing especially when they are embodied in the person holding the most powerful office in the world.

Raising sentiments and questions such as, what has he achieved yet? or They should have waited until he actually achieved something! Illustrates how sceptical and cynical the world has become. The awarding of the Nobel Peace Prize to President Barack Obama is not borne out of naivety, this award like others before it recognises the positive direction Obama has steered world politics. His tone of respectful cooperation as opposed to arrogant confrontation, his use of rhetoric that invites dialogue rather than inspiring resentment and resistance are all worth applauding. What better way is there to applaud Power that is used to bridge the gaps and not to divide further an already fractured world?

That is true leadership and a lesson to all of us to remember that sometimes it is not that we have common goals that is of primary importance; equally vital is how we reach those goals. The means and instruments we use to attain those goals can sometimes be just as or even more important.

Just as Elpis personified Hope in ancient Greece, Obama embodies Hope for a better world in our modern times. Thorbjørn Jagland, president of the Noble Committee is reported to have said unlike all other recipients of the Prize, Obama did not get the call informing him he had been awarded the Nobel Peace Prize. Among other concerns such as the possibility of a leakage was also the uncertainty of waking up a sitting president from his sleep. I say that was a phone call worth making!

This may come as a surprise to many, but China has a long history with Africa. Its involvement dates back to the early 1960s. The question is, why is it only now that this relationship is being scrutinised and looked at closely from all angles?

Well, the not so simple answer is that the nature of China’s involvement in Africa has evolved from one of soft strategic diplomatic ties with cold war undertones to one of serious vested business interests, putting to threat other already existing and established business interests.

There are other factors of course but mainly, China’s need for natural resources and oil defines the character of its current involvement in Africa. It can then be argued that as a major investor in most African countries today, China has a responsibility to conduct its businesses in Africa ethically and with respect for and in accordance with international human rights.

China’s trade with Africa is on the increase. The paradox is that while African markets are flooded with Chinese goods, local industries are feeling the pinch, for instance in terms of job loses in limping textile factories. So while Africa’s reliance on China increases, African governments must also realise that China is a competitor whose activities are slowing down economic progress in areas where Africa could have an opportunity to economically move forward. China’s growing importance as a dominant exporter to United States (US) and European Union (EU) markets is directly affecting the level of trade coming out of Africa as African countries are struggling to compete at the same level and pace as China.

Economic Partnership Agreements (EPA) seem to be causing some jitters on the African continent. At best they are considered as providing Least Developed Countries (LDCs) with access to the EU market and at worst they are viewed with suspicion or have been outrightly rejected. Some of the reasons put forward range from the undue trade competition that might arise from such agreements, while other countries are said to claim that the language of the agreements, whose architect is the European Commission is too complicated and skewed towards the interests of the EU. West African traders have rejected EPAs citing some of the misgivings above.

In Mauritius this past weekend some of the countries comprising the Eastern- Southern Africa (ESA) bloc signed an interim EPA with the EU at the Grand Baie conference centre. According to an unconfirmed report on a Zambian website called the ‘Zambian Watchdog’ it is reported that Zambia’s minister of Commerce Felix Mutati asked the EU Trade Commission to ‘simplify’ the language of the agreement before Zambia could fully participate in the interim agreement. Demands from other participating countries include full market access without trade barriers on exports such as rice and sugar that have strategic economic significance for LDCs. The EPAs still leave out important agricultural produce such as milk, meat and vegetables. Agriculture is the mainstay of most African societies, stimulating export growth in this area would improve the economies of LDCs.

Bearing in mind that WTO rules do not allow members to extend trade preferences to a select group of developing countries and instead, equal preference must be given to all developing countries. The rationale of the EPAs in this regard, is to provide a trade regime that does not depend on preferential market access. As this has not been seen to yield any positive impact in terms of increasing the value of products and the consequent impact on economies of the African, Caribbean and Pacific (ACPs) group of countries. Instead, the reality is that the ACP share of the EU market is declining. Therefore according to a PriceWaterhouseCoopers 2007 Sustainability Impact Assessment (SIA) report, the EU is trying to shift its trade relationship with the ACP from one dependent on tariff preference to one that is WTO compatible. The EU opted to enter into bilateral agreements with regional trading blocs such as the Eastern Southern African (ESA) group, so as to create a basis for an internationally recognised trade protocol allowing the EU to trade with LDCs. They were fears from some LDCs that the EU was simply seeking another opportunity to impose terms and conditions for trade that had earlier been resisted at the Doha Round WTO negotiations. However, the EU for its part states that the EPAs are meant to stimulate sustainable development, in addition to building on the rules of the WTO.

Against this background wrought with uncertainty and suspicion the LDCs and the EU entered into negotiations resulting in ‘interim EPAs’ in 2007. These have since expired but fears still remain that any attempt to fully agree to the EPAs would put LDCs, most of whom are in Africa, at a disadvantage. Firstly it is feared that the EPAs are designed in such a way as to give uncharted free market access for European goods into the African market whereas this is not reciprocated. For instance rules imposed by the EU on ACP exports such as the rules of origin, sanitary and phyto-sanitary standards (SPS) and technical barriers to trade (TBT) are seen to be too strict and unnecessary. LDCs feel they too follow the same hygienic care in growing and rearing their products. EPAs however do provide for capacity building and technical assistance extended by the EU to assist LDCs in overcoming some of these technical barriers while at the same time meeting the standards set for protecting the European consumer, health standards and the environment. Other concerns LDCs have, range from the loss of income on duty taxes to the flooding of African markets with goods of less quality from Europe.

It is hoped that the new interim EPAs will be a precursor for the establishment of a single regional trading bloc for eastern and southern Africa, that will benefit from trade pacts with the EU in services and investment among other things. This all sounds like an effective way of doing business i.e. economic integration and single trading blocs. While this is seen to be working with tremendous success for the European Union, it is bound to be a difficult and complicated task for African countries. Firstly the different regional groups are a manifestation of the different needs present on the diverse continent. Not to mention the different and sometimes contradicting political and historical experiences. Most importantly these regional trading blocs reflect the different economic capacities and the varying trade relations with EU pertaining in different African countries. Harmonising trading blocs is an interesting way to go, a challenge yes, but one worth pursuing by African States. In the mean time it is gratifying to note that potential barriers to trade are being recognised and tackled before agreements are being signed. For instance the request to simplify the language contained in the EPAs is a legitimate request, one that borders on issues of transparency and open communication in international trade negotiations.

The thought of investing in Africa must be daunting for European businesses. The first thing that comes to mind, is the instability that seems to characterise the everyday lives of most African States. United States Secretary of State Hillary Rodham Clinton is currently on a seven-nation tour of Africa. While in Kenya, her first stop, she emphasised the need for a conducive environment if Africa is to attract investors. That is one free of corruption, with responsible and accountable governments that are legitimately elected. That would seem like a tall order but it is not. Given that right now the number of States in Africa that can be viewed as not open for business are a handful. In fact I am having trouble coming up with names, because even those embroiled in one conflict or another within their borders have business ventures of both foreign and local nature.

Most daunting in fact are the trade barriers African businesses face in exporting their products to Europe. Perhaps the African Union or the many regional trade organisations on the continent such as the Common Market for Eastern and Southern Africa- COMESA and the Economic Community of West African States- ECOWAS or indeed the ACP need to come up with a Market Access Strategy no different from the one highlighted in the European Commission’s July 27^th 2009 annual report on US trade and investment barriers. The report identifies trade barriers and measures that prevent full access for European businesses to the US markets.

When significant efforts are put into identifying trade barriers that African countries face in accessing the European market, progress in terms of stimulating the combined economies of Africa is sure to follow. Bearing in mind that this is not a straight forward process, it is one that requires the political will and support of the European Union. On the other hand, the spill over effect of an Africa with strong economies, developed technologies and infrastructure is political stability. This is an objective worth pursuing given that the effects of instability in one region ultimately have consequences for unaffected regions, this, in terms of immigration, refugees and humanitarian aid. Other factors often cited, such as corruption, can also be mitigated by strong economies, high salaries and a sense of ownership. Trade could be the paradox that will ultimately unlock Africa’s seemingly numerous woes.

In the light of the 2009 G8 Summit in L’Aquila, Italy, I am inspired in my first blog, to reflect on Africa’s place at these meetings. I am thinking now on what leaders of the G8 individually and collectively expect from Africa and indeed what the African leaders present at these summits expect from Europe?

There is no doubt that trade is an important impetus in uplifting the nations of Africa from the infancy of reliance on aid to full fledged adult nations, firmly in charge of their own economic destiny. Lately, there have been calls to reduce or completely cut off aid to Africa. Most visible of these calls comes from Dambisa Moyo’s Dead Aid, where she advocates for a complete turn off of ‘aid taps’ in five years arguing that aid fuels corruption while at the same time reducing African governments’ accountability to their electorates. Have these calls been heeded by both Western Donors and African governments? Not yet, at least. Apart from Paul Kagame of Rwanda, there seems to be a defeaning silence from the African leadership on how Africa can or even whether it should wean itself from aid dependency. While the African educated middle class is energised by talk of alternative models of existence, governments seem to be disconnected from this prevailing thought. Just recently a huge scandal involving millions of aid money targetting health programmes was uncovered at Zambia’s ministry of Health, where an organised syndicate of health workers was using the ministry, which is one of the recipients of large amounts of donor funds, to syphon money for personal business ventures. In the wake of this the Swedish and Dutch governments suspended aid targeting health programmes in Zambia. This in turn ignited panic from the government, inspiring quick action to punish the culprits through the Courts. However positive this may be the stigma remains and this episode alone and many others yet untold illustrate and strengthen Moyo’s argument.

What does trade mean to Africa? In my view, it means EVERYTHING! A paradigm shift is necessary in order to facilitate Africa’s shift from aid dependency to trade dependency. Who will help facilitate this shift? What factors will make this possible? Is Europe coming along for the ride? Is Europe ready to see an Africa not dependent on aid? Is the ruling elite in Africa ready to take those first steps to economic independence? Is democracy the ingredience that will bridge the gap between politicians and citizens? What is the role of a policy maker in Africa? These questions and many more will be explored in this blog, so join me as I journey through cyberspace with Winds of Trade!