Lome - A fresh look at non-formal trade
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CTA. 1990. Lome - A fresh look at non-formal trade. Spore 25. CTA, Wageningen, The Netherlands.
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In official statistics, African countries do not appear to do a great deal of trade internationally, but the reality is somewhat different: there is a considerable trade in agricultural products 'on the side'. CILSS (the Permanent Interstate...
In official statistics, African countries do not appear to do a great deal of trade internationally, but the reality is somewhat different: there is a considerable trade in agricultural products 'on the side'. CILSS (the Permanent Interstate Committee for Drought Control in the Sahel) and the Club du Sahel, recognizing the importance of these goods which mysteriously 'disappear', organized a seminar in Lome last November on 'regional cereal zones in western Africa'. What was revealed at this seminar destroyed the preconceptions of many of the participants. As the result of a detailed investigation by a Franco-Italian research team it is now obvious that the suspected blackmarket trade is just the tip of the iceberg. Some 150 authorities on the subject, brought together by CILSS and the Club du Sahel, learned for example, that Nigeria often exports more than 100,000 tonnes of local cereals to Niger, and Ghana sends some 10,000t of cocoa to Togo, even in bad years. The Gambia re-exported more than 65,000t of Thai rice to Senegal in 1986 and 87, and to cap it all Benin even provided some 320,000t of rice for Nigeria at the same time. Naturally these tens of thousands of tonnes of agricultural products never appear in official statistics, and therefore decision-makers and planners take no account of them. But it is no easy task to unearth details of the alternative economy so that developers can take decisions based on reality as it is, not as the official view states it to be. An exacting and onerous task 'Although it is not easy to detect this trade, the existence of warehouses certainly suggests that sizeable transactions do take place. But these big deals happen under cover of darkness and then we have had to investigate the market place, among truck drivers and custom officers before we could determine how much changes hands 'on the side', says Professor Poyuor Some of the University of Ougadougou. This exacting survey has revealed trade networks serving entire regions. This regional integration relies primarily on similarities in farming among the zones. The traffic is at its height along the natural borders separating the Sahel from the coastal countries: Niger swaps cattle for Nigeria's cereals while Cote d'Ivoire exchanges kola for Senegal's fish. The natural advantages enjoyed by some regions do not fully explain these exchanges. 'The real trigger is the difference in monetary and economic policies,' stresses John O. Igue, a geographer at Benin's National University. Most black market trade takes place between countries in the Franc Zone countries and those of other monetary zones. The great advantage of the CFA franc is that it is convertible throughout the world by the Banque de France, while bank notes issued by most of the coastal countries are not officially convertible. 'The aim of trade on the side ' is not just to export local produce at a good price. The Mauritanian trader selling cereals in Mali is primarily seeking foreign currency so he can import other goods, which is difficult to do through official channels because the currency is not convertible,' explains Johnny Egg, a scientist at the Institut National de la Recherche Agronomique in Montpellier. These discreet traders who were once either unknown to the authorities or hounded by them are now the object of much more interest. Privately, everyone recognizes the efficiency and flexibility of these trade networks, which stimulate the flow of agricultural products regionally. Against this must be weighed the fact that imported cereals are now beginning to invade the Sahelian markets. In 25 years imports have grown by 7% per annum,while regional cereal production has increased by only 0.7%. The result of this is a foreign trade deficit and pressure to reduce the prices paid to local producers. And that prevents the modernization of agriculture. A mirror held up to society Even if they do not always respect the laws of the countries involved, cross-border traders do contribute in their fashion to regional food security. Of course, they are not above creating artificial shortages from time to time to push up prices, but over all the trade acts as a stimulus to crop and stock production. Jean H. Guilmette, director of the Club du Sahel, considers that <<these traders hold a mirror up to our society, reflecting both the good and the bad in it. Instead of condemning them, we should seek to understand why they do what they do outside official channels.' The Lome seminar did not generate any major decisions, nor was it an appropriate time for them. But African policy-makers, experts, funding agencies, and even traders all became aware of the complexity of the black market. Few of the participants felt that blame should be attached to these vigorous trade networks, but - on the other hand- neither should the Sahel go on importing ever-increasing quantities of food products. Millions of tonnes of agricultural produce cross borders illegally.
SubjectsMARKETING AND TRADE;
- CTA Spore (English)