Business News of Friday, 23 November 2012

Source: thebftonline

Industrialisation boosts African trade

Intra-regional trade accounts for only 10 percent of the continent’s commerce. The slow pace of industrialisation in Africa is generally believed to account for the slow pace of intra-African trade -- pegged at a dismal 10% of overall global trade.

This pales into insignificance when one compares it to the 60% in Europe, 40% in North America and 30% in Asia.

Africa Industrialisation Day is celebrated on November 20 each year. It is a time when governments and other organisations in many African countries examine ways to stimulate Africa's industrialisation process.

It is also an occasion to draw worldwide media attention to the problems and challenges of industrialisation in Africa.

This year’s theme centres on accelerating industrialisation for boosting intra-African trade, and it highlights the important role trade between African countries can play in reducing poverty, increasing food and nutrition security, and supporting sustainable development.

While intra-African trade is deemed unsatisfactory, trade between the continent and the rest of the world increased from US$246.4billion in 2000 to US$673.4billion in 2009. Data from the Organisation for Economic Cooperation and Development (OECD) further indicate that while trade between Africa and major trading partners was US$673.4billion in 2009, intra-African trade was just US$358billion.

Even with this, oil products accounted for almost 70% of intra-African trade. Thus, it is clearly evident that there is a need to speed-up efforts toward industrialisation to offer the springboard needed to boost intra-African trade. In the opinion of this Paper, this would give the necessary clout for Africa to compete and integrate into the world economy.

This means that if the pace of development is to be accelerated on the continent, a rapid growth of industrial activity spearheaded by power-generation is paramount. This is probably where competencies are lacking.

In commemorating the day, UN Secretary-General Ban Ki Moon noted that the constraints which impede trade expansion in Africa are due to obsolete infrastructure, fragmented economic pace, low production capacities, limited investment financing, and high transaction costs.

We think that eliminating these obstacles is a prerequisite to fully realising Africa’s economic potential, as well as helping to address the continent’s socio-economic and developmental challenges.

There is no doubt that healthy intra-African trade can free the continent from its reliance on international aid and improve its resilience to macroeconomic and other external shocks.

To facilitate trade in goods and services, it is essential to reduce distribution costs by improving and expanding road, rail and other communication infrastructure. Improved energy infrastructure -- including investments in renewable power generation and energy efficiency -- would allow countries to produce more, and more competitively.

Never too late

It is with great relief that we learn the Veterinary Services Department of the Ministry of Food and Agriculture (MOFA) has begun work on recommendations toward review of the Animal Disease Act of 1961 to ensure that meat inspection in the country meets international best practices.

Currently, there is no law to regulate meat inspection in the country, and the outdated Animal Disease Act of 1961 is in desperate need of review to safeguard public health and safety.

Under existing practice, such inspections are limited to imported meat products; and in the absence of any such regulation, it is a common sight to see animals slaughtered in unhygienic conditions across the country -- these meat products eventually finding their way into our markets and points of sale.

Ghanaians consume a lot of meat to supplement their protein requirements, but the manner in which meat is prepared leaves a lot to be desired. It is with this in mind that the Accra Abbatoir was opened and the meat-market at James Town effectively shut down to give the consuming public a better and more hygienic deal.

But the old method of slaughtering animals and using burning car-tyres to remove surface-hair can still be observed in places like Nima, an Accra suburb notorious for animal-rearing.

It is therefore in this light that we welcome a review, since the law on meat inspection has not been updated since 1961.

A new meat inspection law will spell out clearly how slaughter-houses should be; who qualifies to operate one; as well as ensure that animals are examined before being slaughtered to ensure public safety.

The practice where car tyres are used to burn-off the hair from most of the animals that are slaughtered -- such as sheep, goats and cattle -- is not only unwholesome but can transfer the chemicals found in the tyres to unsuspecting consumers, with health implications for public safety.

Raw meat attracts a lot of impurities, and the open manner in which meat is sold in markets and other points of sale without considering the health implications puts the safety of many Ghanaians in jeopardy. The review of the law is long overdue, and the news that MOFA has begun work on recommendations toward a review is in the right direction.