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Draft Paper – Not to be cited without author’s permission

Appendix 4. Africa: Liberalization and Import Dependency

Africa has experienced liberalization driven by structural adjustment policies (SAPs), but as a continent is still relatively new to trade agreements, and is sometimes thought as the next frontier for that stage of liberalization. Nevertheless one can examine the effects of the liberalization that has already taken place in Africa.

Liberalization in most African countries, generally mandated by SAPs, has typically included market opening, reduced credit for small farmers, and cutbacks or privatization of state grain marketing enterprises which, while riddled with problems, previously offered small farmers some guarantee of access to national markets. Market opening has often led to surges in imports, and the consequent hemorrhaging of scare foreign exchange and severe balance of payments problems. In a number of cases this has pushed governments into policy reversals. 95

U.S. grain exports to Africa have grown during the decades of SAPs, privatization and to the extent it has

Figure 7. Average annual U.S. grain exports to Africa in the 1980s and 1990s (a), and African total grain and maize imports (quantity) as a percentage of African domestic grain and maize production in 1979 versus 1999 (b). Source: FAOSTAT

production, particularly 0 0 in the grain maize 1979 grain maize 1999 average 1980s average 1990s case of maize. Figure 7a shows the growth in U.S. grain exports to Africa from the 1980s to the 1990s. Figure 7b shows how imported grain as a percentage of domestic production has grown from some 30% to about 38% in twenty years, while imported maize that is grew from less than 1% of domestic production to more than 21%, evidencing a tendency toward growing dependency on imports.

U.S. exports to Africa (Millions MT)

3.06

4.66

Imports as % of Domestic Production

29.8

37.8

21.4

0.8

a

50

40

30

20

10

b

exports to Africa have grown, so has the proportion of grain imported by African countries compared to their own domestic

6

5

4

3

2

1

already

happened,

WTO-led

market

opening.

As

American

grain

Beginning in 1987, the International Monetary Fund (IMF) placed a number of countries in Sub-Saharan Africa under “Enhanced Structural Adjustment” (ESAF) programs.96 This involved debt relief under concessional terms in exchange for intensifying SAP provisions. In Figure 8 we observe that increased imports, as a consequence of the greater market opening forced on them, was a feature of these countries. As we saw in the Mexican case, greater food imports have a tendency to make it difficult for national

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