Globalization's Impact on Africa's Economy
Globalization is viewed by organizations and governments as a tactical answer to the continent of Africa's severe poverty and starvation. The lives of those who live in Africa's most impoverished areas have not, however, been improved by the current global economic system. Somerville (1) claims that famine and drought-stricken countries in Eastern and Southern Africa are feeding millions of hungry people.
The Argument for Globalization
Globalization proponents contend that it will lead to a greater degree of economic modernisation across the continent and the removal of trade restrictions. Opponents of a liberal economy contend, however, that it has harmed Africa's economy. The free trade has successfully threatened the livelihoods of millions of people especially those in the agricultural sector.
Challenges Faced by African Farmers
Due to globalization, farmers in Africa have lost their market share to cheap imported products. Cheap imports of processed agricultural products like sugar and milk undercut the price farmers need to survive. The farmers are therefore becoming poorer or forced to grow other crops. These countries have lost their comparative advantage in capital accumulation, which has been facilitated by a large and prolonged inflow of foreign aid. Somerville argues that globalization has further altered new trade situation of countries and slowed the growth of farm products consumption (1). These changes have been characterized by the decline in costs of cross-border trade in agricultural products, fuelled by low transportation costs and advancement of information and communication technology. These developments, together with reduced government interference in agricultural trade, have boosted global economic growth, and in the process altered global agricultural production with African nations that find it difficult to compete favorably with developed countries.
Opportunities and Reforms
While globalization has presented numerous problems to African economy, it has also allowed better economic management. Nations in Africa can take advantage of changes brought by globalization to be part of partnerships offered by international institutions, and increase their economic growth. It is a long term goal that must be accompanied with reform by the African nations to ensure terms of trade are fair. Although the process is leading to inequalities between nations and within countries, African's must be prepared for economic globalization.
African Challenges: Western Pressure and Technological Difference
Globalization is responsible for the decline in Africa states in the global economy. Adverse effects on the globalization process have been brought by increased pressure for liberalization in Africa from western governments and World Bank. The financial support and subsidy given by US and the European Union to their farmers allow eliminating local competition from local farmers. These countries demand that African governments reduce and or cut subsidies to their farmers, yet they protect their own farmers.
Balancing Globalization and Fair Competition
To ensure Africans benefit from globalization and don't suffer from unfair international competition, globalization should be structured by international rules and institutions. These rules should stress the importance of human development and not just the aim to fulfill national advantage and self-interest of corporates. Given that the difference in technology is one of the striking factors for declining demand for local African products, Africans need to embrace information and technology that give them a competitive edge (Anderson 1). This will allow them to keep up with new trends, reduce costs, and add value to products instead of just selling raw goods. This will go a long way to ensure the economic survival of countries, such that farmers continue producing products without losing the market.
Works Cited
Anderson, Kym. “Globalization’s effects on world agricultural trade, 1960–2050.” Philosophical Transactions of the Royal Society B: Biological Sciences 365.1554 (2010): 3007-3021.
Keith Somerville, Keith. “Africa: Globalization or marginalization?”. BBC News Online (2002). Available at: http://news.bbc.co.uk/2/hi/africa/2538665.stm
