20100630
allafrica

Africa is reaping huge gains from the deepening of trade ties between it and other emerging economies, a new study shows.

Asian, South American, and Arab nations are pumping billions of dollars into Africa -- mostly as concessionary loans to boost trade and investment-- without conditions unlike the practice with traditional development partners.

The growth of the South-South co-operation has diversified the continent's base of development and trade partners while bolstering its clout in global decision-making.

The report by the United Nations Conference on Trade and Development (UNCTAD), says there is growing disappointment in Africa with existing mechanisms which are seen as lacking commitments and stifling by setting policy directions.

With governments as the main stakeholders, the new partnerships are based on mutual respect, reciprocal benefits, respect for sovereignty, and non-interference in internal affairs of partners.

The report says the inability of African countries to influence the agenda, pace and decisions made in the international economic, financial and trading systems has also increased interest in South-South cooperation as a mechanism for increasing the region's bargaining power in global affairs.

"Consequently, they see South-South cooperation as an effective way to increase their voice and representation in the world economy," reads the report.

Analysts say the activism of developing countries is producing results.

These countries, for instance, had a strong influence in setting the tone and agenda of the fourth World Trade Organisation (WTO) ministerial conference held in Doha in 2001 and have been credited for the inclusion of development issues in the negotiations.

"Since the launch of the Doha Round, African countries have further increased their capacity to participate in the negotiations in an effective manner and it is becoming increasingly difficult for developed countries to further their interests in the global trading system without offering concessions to address the interests of the region (Africa) and those of other developing countries," UNCTAD says.

African countries and their new-found allies in the fast-growing emerging markets, are solidifying their close relations, usually by way of high profile meetings between heads of state.

A few weeks ago, President Kibaki travelled to China to follow up on some multi-billion shilling infrastructure projects with his host, President Hu Jintao.

The government has formally requested the Chinese government to partner with Kenya in the construction of a railway network from Lamu through the Northern parts of Kenya to Southern Sudan and Ethiopia.

Other projects are the development of the first three berths and associated infrastructure of the second port of Lamu, construction of standard gauge railway from Mombasa to Malaba, and a mass transit light rail system for the Nairobi metropolis.

China's growing influence in Nairobi mirrors its bulging muscle elsewhere in the continent as it accounts for a larger share of the trade volumes and aid support to Africa coming from emerging markets.

But while Africa's trade with the emerging markets rises, the trade is merely a shift from one partner to another, with Africa's exports consisting mainly of primary commodities while it remains a net importer of manufactured goods.

In addition, the relationship is driven by the non-African countries who have clear objectives - support in addressing global issues, access to natural resources and markets for their manufactured goods - unlike the continent that is yet to develop a common set of expectations from the deals, the report says.