EU's renewed trade ties with Africa will boost development

Posted on : Tuesday , 12th July 2022

The European Parliament has passed a motion calling on the EU to elevate tech transfers and trade with Africa so the developing continent can move beyond the paradigm of mostly supplying cheap raw materials.

Backing a report that advocates redressing imbalances left over from the colonial era, the multinational legislature signalled it wants to better equalize trade relations to enable Africa to move up the development and digital scale.

Kathleen Van Brempt, a Belgian Member of the European Parliament (MEP), says “For too long, Africa has been reduced to a supplier of raw materials, with the result that the continent’s immense economic potential remains untapped”.

Fellow Belgian MEP Saskia Bricmont says the EU should emphasize improvements and funding for infrastructure, food security, civil society, free trade agreements and sustainable economic development.

The two Belgian MEPs might have a particularly strong reason to regret past mistakes. Historians consider Belgium’s colonial record in Africa the worst among European powers.

Before the vote, the parliament heard how the majority of goods imported into the EU from Africa are cheaper primary goods such as food, beverages and energy, while the EU exports higher-value manufactured goods such as machinery and pharmaceutical products to Africa.

“Due to the continued direction of trade from colonial times, wealth is being transferred continuously from the African periphery to industrialized and increasingly digitized centers,” the EU report said.

Under EU structure, the parliament has little power in foreign policy and trade, so “we want to push the European Commission to fundamentally redefine relations with Africa”, says Van Brempt.

The relations need a reset after a dispute over whether to waive intellectual property rights on Covid-19 vaccines. Added impetus now comes from the conflict in Ukraine and its fallout. Europe is looking to boost gas supplies from the continent while African nations have food security concerns as massive grain stockpiles and other food supplies from the warn-torn area are blocked.

Since spring African economies have been battered further as prices for food, fuel and fertilizers skyrocketed. African Union chair Macky Sall, the president of Senegal, met Russian President Vladimir Putin requesting the release of food supplies that have been blocked in the Black Sea.

Also earlier this month the EU pledged 600 million euros to help vulnerable nations weather the food security crisis. The funds include 150 million euros in humanitarian assistance for African, Caribbean and Pacific nations and 350 million euros to boost sustainable food production in the long term.

Of course, the need for more equitable relations with Africa long predates Covid or the current Ukrainian conflict. The centuries-long saga is replete with tragedy and exploitation. In recent years European Commission President Ursula von der Leyen made closer ties with Africa one of her major foreign policy goals as she assumed the leadership position in 2019. At a summit of European and African leaders earlier this year, the commission announced plans to invest 150 billion euros in Africa.

The importance of the issue was again underscored as the Group of Seven (G7) industrialized countries met in southern Germany, where they pledged to raise $600 billion in private and public funds over the next five years to finance needed infrastructure in developing countries in Africa, Asia and Latin America.

To strengthen supply chains, Europe will need to invest in digital corridors in Africa. An example is a pilot project for Kenya’s European flower trade that enables real-time electronic exchange of trade information. Plans are underway to deploy the technology to other key regional value chains such as fish and horticulture.

Other fundamental changes needed include a shift in Africa’s cargo shipping from planes to ships to reduce the carbon footprint and cost of goods. The continent will also need more modern logistic centers to benefit from the improving physical and digital infrastructure. The EU has already helped develop one such facility, the Gulu Logistics Hub in northern Uganda.

Most African governments are under enormous fiscal pressure due to the current state of the global economy. Crucial investments supporting sustainable trade are needed now more than ever. The time for promises and talk is over.

The Africa Free Continental Trade area established in 2021 will be a help in supporting modernization of African trade and will enable intra-Africa trade to grow by 121 percent by 2030, according to a United Nations study.

As parliament member Van Brempt told journalists, now is the time for the EU to share its technical knowledge with Africa to encourage on-the-ground manufacturing.

Areas of mutual commercial benefit also include issues such as the supply of hydrogen for green energy, Van Brempt said, noting that renewed trade ties could help bring Africa closer to the EU on a strategic level.

With such core issues as energy, food and health in the balance, it’s time to finally assist Africa to reach a more equal level on the development scale for the good of all. It appears the EU is now truly determined to do that.