zambia’s trade wars with kenya misguided

The fear of Kenyan big business is not limited to the East African Community. Zambia is the latest country to impose non-tariff barriers to trade (NTBs) against Kenya. The Southern African nation banned imports of dairy products from Kenya. Lusaka is also involved in a spat with Nairobi over palm oil based cooking oil. Both countries are members of the regional trading bloc COMESA. Thankfully, Kenya has not reciprocated any of Zambia’s misguided sanctions.

Lusaka should realize that the only people who benefit from protectionist policies are inefficient business owners who should be allowed to experience Schumpeterian creative destruction. Ordinary people at the supermarkets and kiosks just want cheap goods. Period.

Kenya’s Business Daily reports:

“We will not allow any milk imports from Kenya because it will negatively affect the growth of our dairy industry,” Mr Machila told the Times of Zambia last Thursday as Comesa moved closer to delivering its verdict on the five-year dispute.

Industrialist Vimal Shah, whose company Bidco Oils is the largest producer of cooking oils in Eastern Africa, says lack of clarity on Zambian demands remains the biggest obstacle to trade between the two nations. “Zambian authorities have remained shadowy with regards to the palm oil-based products and we don’t understand what they exactly want,” he said. “We have had several missions come around to verify whether such products are done locally but they never produce any confirmation reports.” Zambia is however known to prefer local production of cooking oils to help generate employment and tax benefits.

comparative development…

William Easterly has this neat collection of pics to show just how badly Africa is doing in many sectors compared to the rest of the world. The Continent’s share of global trade is a paltry 2%. In the 1960’s Africa’s share of world exports was 3%. By the 1990s the same had declined to 1%. The decline in exports did not translate into more intra-continental trade – which still stands at a dismal 10%. This despite the proliferation of regional trade agreements on the Continent (ECOWAS, SADC, EAC, COMESA, ECCAS, SACU…..). It would be interesting to analyse just how effective these regional trade pacts have been over the decades. Me thinks that like the OAU and latterly the AU they have merely been big men’s clubs with no real impact on trade and development. But I could be wrong.

An illustration of Africa’s ever shrinking share of world trade since the 1950s can be found here.

another joke from the Continent

If you thought the election of Libya’s life President, Muamar Gaddafi, as president of the African Union was a joke wait till you hear who was elected chairman of COMESA, a regional trading block that comprises most of the nations on the east coast of Africa. Yes, Robert Mugabe, Zimbabwe’s strongman who ran his country’s economy aground has been elected chairman of COMESA! And as expected, this has generated some protest in the African blogosphere.

How do these guys pull off such stunts with a straight face?