A WEST AFRICAN RESPONSE TO TRADE INTEGRATION:

Transcription

1 A WEST AFRICAN RESPONSE TO TRADE INTEGRATION: OSEI OTENG-ASANTE WSSF CONFERENCE, FUKUOKA-JAPAN National Graduate Institute for Policy Studies TUESDAY, 25 TH SEPT, 2018

2 THIS PRESENTATION A study of the complex dynamics of local and regional integration in a globalizing world. Examines what happened to local and regional economies, how and why. Focuses on internal trade as a vehicle of integration of West Africa and SSA. Go beyond recorded statistics to study the real extent of internal trade integration. Explore notions of trade-induced regional economic integration and development. Improves understanding of Size and strength as well as interconnectedness of regional and local economies. Historical & continuing global and regional economic development disparities. 2

3 OUTLINE Introduction (Slide 4) Data & Framework (Slides 5) Statistical Overview (6-10) Interpretation of Internal Trade Data Constraints and Feasible Trends in Internal Trade: An Illustration Structure of Internal Integration (11) Kola, Livestock, Cocoa Factors Affecting Integration (12-14) Merchant networks and the Transportation System Currency, Banking and Financial Services and Tariff policy Comparison of Contemporary Trends of Internal trade (15-18) Trends of Internal trade in SSA ( ) Trends of Intra-Asian Trade ( ) Summary and Conclusion (19-20) 3

4 THE CONTEXT Trade oriented economic development and economic globalization. Intercontinental orientation of African trade & studies (e.g. Bauer, 1954; Hopkins, 1973). Effect of the integrative nature of colonialism (Invigoration of Trans-Atlantic legitimate trade) Discussion of Internal W. African trade is limited and less regionalized Favourable context to suspect the growth of local and regional trade: Regional trade in pre-colonial W.A (Lovejoy,1973; Curtin,1975; Inikori, 2013). Potential effect of intercontinental trade on local and regional trade. Study of W. African economic progress and its past. Intractable poor long-term economic development and rise of long-term analysis 4

5 DATA AND FRAMEWORK Study is from British West Africa (BWA) trade statistics perspective. Internal trade is a sum of foreign regional (inter-territorial) and domestic (intraterritorial) Data characterization Hard stats. (mostly foreign trade) comprehensive, limited errors of omission & commission Soft stats. (mostly domestic trade)- absent values or prices for most captured landborne trade Uncaptured stats. (mostly domestic but appreciable foreign) unrecorded Officials readily admitted not many land-borne trade have been recorded. Thus, the real amount of intra-regional trade must have been much larger. 5

6 20% 18% 16% 14% Fig 1:Proportion of Internal Trade to Total BWA Trade: (1) : Fluctuating Decline (of trade between BWA and FWA) (2) : Fluctuating Growth with surge of domestic trade (3) : Decline (a reflection of data absence) 13% INTERPRETATION OF ESTIMATES: DECLINE, GROWTH AND SUBSTITUTION 14% 13% 16% 15% 15% 14% 18% 15% 14% 15% 12% 10% 8% 6% 4% 10% 12% 10% 10% 10% 11% 12% 10% 7% 9% 9% 11% 9% 10% 11% 7% 7% 6% 6% 6% 5% 7% 9% 7% 10% 9% 7% 9% 12% 5% 7% 6% 4%4% 4% 6% 4% 2% 3% 4%4%5% 4% 4% 3%3% 3% 2% 2%2%2% 0%

7 TOWARDS A CONSOLIDATED ESTIMATE OF INTERNAL TRADE Hard Data Proportion of re-estimated inter-territorial trade in WA is 9%. Intra-territorial long-distance trade was also substantial and averaged about 4%; Making captured and valued trade 13%. But: Soft Data Even when detailed domestic statistics is available, they do not always include values or local prices to facilitate conversion and inclusion. Uncaptured Data Not much land-borne trade, across or within WA territories, were recorded; Colonial officials and data recorders openly admit that not much domestic trade was recorded (See sample quotations on slide ). Thus, hard data + soft data+ uncaptured data Real Internal Trade All this implies that the real recorded amount of internal trade of West Africa may have been close to 20%, especially as its highest recorded point in 1915 was 18% (See fig.6). 7

8 North Bound SOFT DOMESTIC TRADE STATISTICS Table 1: Volumes of Northern Territory Trade within Gold Coast in Various Units Commodities Kola 7,909 10,909 13,333 17,535 8,976 16,305 97, ,879 60,085 66,018 68,158 English Cloth 1,390 4,347 2,509 2,690 2,810 12,295 13,351 17,054 4,619 3,091 Salt 1, ,863 11,030 13,260 9,292 15,812 17,059 30,567 39,176 56,825 59,877 Miscellenous 820 1, ,705 7,243 9,524 12,007 11,660 6,611 South Bound Native Clothes 1,837 6,775 4,378 3,211 2,951 1,953 Cattle 4,495 8,996 12,386 16,140 15,903 40,346 45,018 20,412 46,244 47,919 43,955 Sheep and Goat 18,773 28,683 43,194 67,961 77,817 74,956 60,752 6,519 53,475 63,333 76,980 61,580 Donkey 3,866 6,840 18,189 9,066 6,485 9,087 37,789 26,656 19,080 13,484 14,017 Shea Butter 2,614 2,615 4,739 7,721 14,592 9,275 6,574 6,424 5,580 Dawa Dawa 2,027 2,277 3,194 2,128 7,403 6,762 4,831 7,427 4,213 Hides 1, ,721 1,390 1,355 String & Rope 2,232 1,306 1, ,163 Yam 16,482 3, , Dried Fish 5,777 5,026 5,387 5,320 4,359 Corn 1,425 1, ,564 1,579 Fowls & Crates 12,964 62, ,165 10,980 8,998 Ground Nut 6,356 4,557 3,744 4,244 2,711 Miscellaneous 2,079 4, ,938 17,058 16,885 11, ,641 6,599 Source and Notes: Annual Colonial Report of Northern Territory

9 UNCAPTURED (INTER & INTRA-TERRITORIAL) TRADE Sierra Leone,

10 Figure 2: An Illustration of the Trend of Internal Trade Impression A: Trend based on estimates of trade statistics Impression B: The growth of rail traffic (data available in volumes) probably sustained the rising trend to c Impression C: The road traffic, which competed with the rail traffic, grew, and probably sustained the rising trend. 1919/

11 Fig.3 An Illustration of the Structure of Internal Trade Cocoa provided vertical flows from forest to coastal regions before exports, and created demand for local consumption. Kola from forest regions and livestock from the savanna provided vertical flows. Savanna Regions Kola Forest Regions Cocoa Livestock (Cattle, Sheep and Goats) Production Expansion And Consumption Kola dominated horizontal flows across forest regions (but sometimes also through coastal trade). Coastal Regions Overseas 11

12 MERCHANT NETWORKS AND TRANSPORT SYSTEM Merchant Networks and Internal Trade Estimates Reliance on indigenous networks built around socio-cultural commonalities tended to place them outside the purview of officials, and thus the potential for recording was limited. Extensive use of land-based transportation, especially road and motor transport from the middle of the 1920s, confirm the potentiality for their activities not being captured. Return cargo linkage is suggestive of the extent of commodity exchange. Transport and Internal Trade Estimates dominance of land-borne routes from 1900 accentuates soft and uncaptured data. Railway (mostly soft data) vrs Roads and motor transport (uncaptured data). Triumph of flexible motor road transport the inter-war period implies more uncaptured data. 12

13 CURRENCY, BANKING, TARIFF AND TAXATION Effect of Currency and Banking Development on Estimates. Quantity Theory of Money (MV=PT); T is of functional interest here. Consistent and Increasing circulation/absorption of currency is suggestive of increasing internal trade. Dominant use of informal credit and suggests potential unrecorded trading activities must have been enormous. Effect of Tariff and Taxation on Estimates Rapid decline of BWA trade with FWA territories. (See fig.13) Import duty and substitution kola trade from Southern to Northern Nigeria was land-borne (Soft & Uncaptured Data). Re-orientation to new markets in FWA tended to be land-borne, more prone to smuggling due to differential tariffs and export duties (Soft and Uncaptured Data). Requirements to pay participatory and civic taxes in cash meant cash had to be found. 13

14 Fig. 4 An Illustration of the Trend of Internal Trade (2) As per Illustration C of Figure 2 Transport and tariffs tended to territorialize trade leading to inter-territorial trade decline. Land based transportation sustained expansion of intra-territorial domestic long-distance trade 14 Ecological commonalities and diversities underpinned all types of trade

15 CONTEMPORARY TRENDS IN SUB-SAHARAN AFRICAN TRADE Neither intercontinental or intra-regional trade has increased substantially Sub Saharan Africa s share of global trade has declined (See next slide): Intra-African trade has seen modest upward trend (See next slide) More Regional Trade Agreements limited increase in intra-regional & declined intra-rta trade? Trade within African RTAs averaged 8-9% of overall trade in (past vrs global) Intra-RTA has decreased 13% between (UNCTAD, 2013) Only COMESA and EAC shows increase! Impetus from the African Continental Free Trade Area (AfCFTA)? (March, 2018)

16 25.0% Fig 5: Patterns of Sub-Sahara Africa Trade: % 21.5% 18.2% 15.0% 10.0% 5.0% 0.0% 11.1% 9.4% 9.4% 6.5% 6.0% 4.5% 4.3% 3.8% 3.8% 3.3% 3.6% 3.0% 3.4% 13.1% 12.9% 11.8% 7.8% 5.4% 2.4% 2.6% 1.8% 1.4% 1.4% 1.8% 2.2% 1.8% Intra SSA Trade SSA Export to World Source: IMF, IMF Data, Access to Macroeconomic and Financial Data, Direction of Trade Statistics 16

17 EXPLAINING PERFORMANCE Low levels of industrialization and the failure of post independent ISI policies Development, maintenance & connectivity of critical Infrastructure Railways, Roads, electricity & comm. (Okou, 2010; World Bank, 2013) Highest transport cost of in the world (UNECA, 2010); Land-lock countries and intra-trade Lowest on the Ease of doing Business (World Bank, 2013) High Uncertainty of trading cost and time delays (Christ and Ferrantino, 2011) International and intra-state conflicts

18 80.0% 70.0% 60.0% 50.0% 40.0% Fig.6: Intra Asian Trade in Perspective; (1) Correlation with Post-war economic development in Asia. 40.9% 39.5% 44.4% 52.4% 50.7% 58.2% 68.4% 69.7% 30.0% 27.1% 29.9% 32.2% 35.4% 35.1% 34.7% 27.4% 30.1% 30.4% 20.0% 18.4% 14.3% 14.2% 13.7% 13.8% 16.2% 16.5% 21.3% 22.4% 22.8% 22.0% 10.0% 0.0% % of Asia Export in World Export % of Intra Asian Trade Source and Note; Takanaka Intra Asia trade refers to the value of exports from 10 Asian Countries (Japan, Four NIEs, Four ASEAN 18 Countries and China. (Sourced from Sugihara, forthcoming)

19 SUMMARY AND CONCLUSION Proposed data framework: Evolution and dynamics of trade integration in West- Africa may be close to 20%, from 13% based on hard statistics ( ). Indigenous dynamism: Continued adaptability of local traders and producers assisted sustenance of trade responses in regional integration (almost without direct Colonial support) ( ). Network of regional trade routes offered a degree of economic unity, partially integrating ecological, geographic, cultural, political and economic spheres ( ). Contemporary policy makers may have to question their understanding and assessment of the size and strength of local and regional economies. unlearn the colonial trade accounting orientation to account for much of informal trade as well as domestic long-distance land borne trade within the national and region territories. 19

20 SUMMARY AND CONCLUSION Interplay of the understanding of initial conditions and the legacy of history in the pursuit of economic development. 21 st Century demographic dividend in SSA and West Africa, and intra-regional trade vis-à-vis sustained economic development? Potentially, but not guaranteed: Transport and geographic constraints; Continued Indigenous responsiveness and dynamism; External and global economic policy environment; and Savings accumulation and investment in both human and hard capital. 20