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Access vs. aid: The economic promise of Africa’s new trade agreement

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In battling poverty in the developing world, the West is often consumed in debates about foreign aid. Yet many of the core problems stem from more basic lack of access to the pond and opportunities create, participate, and collaborate therein. Last spring, in an effort to address those problems, 44 African leaders and government officials agreed to create the African Continental Free Trade Area (AfCFTA), seeking to improve access to markets and bolster intra-Africa trading relationships across the continent.

The participating countries have agreed to remove all tariffs from 90 percent of goods, a move that is expected to increase African trade by 52 percent, according to the U.N. Economic Commission on Africa. The Washington Post describes it as “one of the world’s largest free-trade areas,” covering “more than 1.2 billion people and over $4 trillion in combined consumer and business spending.”

Despite the continent’s current reputation for countries mired in governmental corruption, African trade advocate Linda Kavuka reminds us that it maintains a long history of vibrant and free exchange. “Land ownership was transferred from one member of the family to another; there was no state intervention in this process,” she explains. “The council of elders or the monarchs did not control what families produced in their farms and who they traded with. Ancient trade routes sprouted modern cities developed from the spontaneous order of trade, not by the decree of traditional rulers.”

That basic disposition and hunger for economic opportunity is alive and well in the lifeblood of everyday Africans across countries and regions. “Contrary to the belief that Africa is inherently socialist,” she continues, “traditional African societies practiced free trade and private ownership of property.”

Yet even with African countries achieving greater access to markets and trading partnerships, Kavuka worries that the influx of foreign aid may continue to enable government corruption and interfere with whatever economic or social progress is to come. “Instead of improving the living conditions of the 600 million people who live below the poverty line, much aid is making the rich richer and the poor poorer,” she writes. “It catalyzes the vicious cycle of corruption and poor economic structure, hindering economic growth.” Noting the nearly $124 billion in Chinese loans received by African countries, and billions more in annual international aid, Kavuka wonders whether the subsequent dependence will distract African governments and businesses from the new channels for growth.

Such concerns illustrate that the problems of foreign aid go well beyond their economic ineffectiveness. They alter cultural attitudes and economic imaginations about the future. Thus, rather than continuing to look to the empty promises of foreign aid, we’d do well to realign our attentions to economic empowerment from the bottom up, not just through improved trade relationships between African countries, but also in better connecting those countries and workers with trading partners across the world.

As explained in the “Circles of Exchange” episode of the PovertyCure series, having access to stable networks of trade and exchange is one of the greatest challenges to the world’s poor.

“Where people have freedom, and are linked to circles of exchange, their capacity to create wealth for themselves and their families is unlocked,” says Michael Matheson Miller. “…There’s a reason for this. God made us free. And where the political and economic conditions reflect our nature, people prosper.”

Foreign aid will accomplish little if people don’t have the right pathways to serve and collaborate with their neighbors. We were made to create and we were made to trade. Markets empower individuals because they empower creativity and community collaboration, and back and forth and back again. Where disconnectedness persists, struggle is bound to follow.

Image: GovernmentZA, President Cyril Ramaphosa visits Rwanda (CC BY-ND 2.0)

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Joseph Sunde is an associate editor and writer for the Acton Institute. His work has appeared in venues such as The Federalist, First Things, The Christian Post, The Stream, Intellectual Takeout, Foundation for Economic Education, Patheos, LifeSiteNews, The City, Charisma News, The Green Room, Juicy Ecumenism, Ethika Politika, Made to Flourish, and the Center for Faith and Work. Joseph resides in Minneapolis, Minnesota with his wife and four children.

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