Effects of Political Differences on Trade and Industrialization Development in Africa - Research Paper

Introduction

Industrialization has been defined in many different ways by different scholars. The most interesting aspect in all the definitions is that all of them revolve around a clear idea that industrialization is a transition from one level of the economy, to another, or rather a fundamental transformation of the society as far as industries, manufacturing, economic capacity and improvement of nonindustrial sectors are concerned. About the nonindustrial sectors of the economy, the sense of equality has to be evident. This means that industrialization elevates the nonindustrial sectors in the society to an echelon that is similar to the capacity of large-scale sectors in the society.

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Compared to the rest, Africa is the least developed continent in the world. Many contributing factors have led to the situation, but this paper delves specifically on the tendency at which political affiliations and differences in Africa have affected trade and industrial development. African politics are active and have a lot of impact in almost all spheres of life. Therefore, this paper is aimed at revealing the cross-cutting issues under a political umbrella which are related to the subject of the matter.

Therefore, trade and industrial development have been seen to have a certain unending relationship with the political array. In other words, one affects the other in one way or the other. An APA formatting style will be used in this paper, and all citations will be provided in APA format to present contents and to unravel the hidden facts about how political domain in Africa influences the exchange of goods and services and the emergence of powerful industries. This particular research paper is meant to cover both positive and negative impacts which are brought by democratic differences cutting across the board into the leadership part of it. Also, the political connection between the African continent and the western world will be incorporated in order to strengthen the correlation between the two main factors in a subject.

Delloitte, according to his study categorized Africa as a continent which is prone to attract political violence more than any other continent. Africans are termed to have the greed for power and yet deliver poor leadership qualities and therefore exposing the continent at stake. It seems those who are in power are not meant to be where they are and that those who are destined to lead have been suppressed (Delloitte, 2012). For example in Kenya, it was the so-called political difference that claimed the lives of many in the year 2007/2008. Election violence has negative consequences for the economy. Therefore, Africa is doomed to be affected so much by the political pressure.

In most African countries, political violence which took place almost a decade ago is still affecting different sectors of the continent. This implies that most of the nations are still experiencing the post-violence effects. The losses which were incurred by then have become difficult to be recovered while normality has become a hard task to achieve in Africa (World Bank, 2011). The rise in the number of political parties in Africa has reduced its potential and the capacity to achieve greatness. When people are affiliated to different political parties, it means they have differences in most of the dimensions of life. This brings about long-term hatred, antagonism, racism, and liberal colonialism.

According to Andreassen et al. (2008), most of the negative impacts of political differences have become long-term, and none of the sectors affected has shown a single sign of regaining, recovery, relief or sanity in its operations. This kind of negative and long-term history will assume the nature of a generational trend. The future generations who are yet to be born will also experience what the current generation is going through. The agony was caused by the past generations, the present generation if experiencing the pains and the future generation will automatically test the same bitterness. This explanation tries to expound more on the seriousness of political turmoil to all sectors of the economy, including trading, industrial development and also other nonindustrial sectors.

Good welfare and long-term prosperity and development in every sector have become an objective that Africa has yearned over years and years. In such a scenario, the continent has found itself in between a rock and a hard surface. Poor health conditions, higher rates of malnutrition, poor governance, corruption, ethnicity and civil wars, higher poverty index, unemployment, youth restiveness, elevated corruption cases, and more so political instability have still become the dominant factors in the black continent (Schumacher 2013). The latter statement informs of the great contribution of political instability towards the poor state of the nations in the continent of Africa. The essence is that, when a political crisis happens, it means the leadership is not in one accord, and the whole system of governance is poisoned. The leadership of any nation is the one which is supposed to steer change and progress of the nation. However, when there are wrangles and disagreements, it means a lot of time will be wasted in solving differences between political leaders, while the main pillars, bound to support the development agenda in the continent are neglected and left at stake.

On the other hand, Campbell and Saha, (2013), according to their research found that political instability is the same language with political differences. When there is a head-on collision between two or more political parties, most a times these parties decide to amass wealth as a revenge of the hard-fought battle. Any party can decide to squander the wealth of the nation inappropriately. This leads to the situation that a greater proportion of wealth goes to the hands of a few individuals while the rest of the nation suffers. The use of the national resources for any other reason other than use for development agenda endangers the state of the nation (Delloitte, 2012).

A more advanced consequence of political affiliation, instability, and violence to the wellbeing in Africa is that this factor erases the security of property right. This consequence, therefore, restricts direct foreign investment making capital inflow impossible in Africa. It also lowers the rate of capital formation and encourages capital outflow. In simple terms, the rate of capital outflow becomes higher than the rate of income inflow to the continent (Abu et al., 2014) All these factors originate from the political factor, and all of them intertwined, pose a clear impediment to trade, industrialization and economic development on African economy.

Trade in Africa

Most countries of the world are deeply integrated into the world economy in some ways. These include both the developed and developing countries. Most countries of Africa belong to the category of the developing world, which is sometimes referred to as third world countries. Other developing countries are found in South America and Asia. In world trade, Africa is not left out based on the fact that there are numerous natural resources found in Africa (Rauch, 2001). Countries such as Nigeria are rich in oil which is sometimes referred to as black gold. Burkina Faso, Ghana and the Democratic Republic of Cong are rich in Gold deposits while South Africa has rich diamond deposits. There are various countries in Africa with more of these natural resources and this point out to the fact that Africa is the center of global trade.

According to Meillassoux (2018), Africa tends to be the only continent which is regarded as a single entity. However, most Least Developed Countries are found in sub-Saharan Africa. The role that Africa plays in world trade is nevertheless essential. Meillassoux (2018) assert that the continent exports about 2.4 percent and sub-Saharan Africa accounts for approximately 1.7%. It means that the Least Developed regions of Africa are having vast resources and enormous economic potential.

Two-thirds of Sub-Saharan imports are finished products. Fuel and agricultural products are also essential. Germany exports, engineering products, vehicles, and chemicals to African countries. Other exports from Africa are mostly raw materials which are primarily used in overseas industries. These comprise of fuels, metals, ores and agricultural products. A significant amount of these exports creates employment opportunities in the continent, and this explains why there is widespread poverty as a result of unemployment on the continent.

Approximately, sub-Saharan Africa has a Gross Domestic Product of USD 3,260. North Africa, on the other hand, has a GDP of USD 10,726. Sub Saharan Africa has an informal unemployment rate of 70% while North Africa has an informal employment rate of 62% (Meillassoux, 2018).

Africa is not a victim of the integration deficit, which emanates from poor integration in international trade. The perception that African countries do not engage in international trade is only based on a quantitative approach. In as much as the world is rushing towards a regional and mega-regional trade agreements, it is essential to look at the place and role that African continent has in all of its evolutions. International trade in Africa is reformed, and boundaries for the global economic governance system are already set. Majority of African states are adherents of the World Trade Organization. Meillassoux (2018) explains that African states denote almost a quarter of the organization's shareholders (43 out of 162 members) and that these states and their regional economic blocks are actively taking part in a series of multilateral, regional and bilateral negotiations which promotes international trade. It is challenging to deny the fact that Africa is making efforts to widen its position in the international market. In his work, Van Marrewijk (2017) says that government officials in Africa are making efforts to challenge the global North and the World Trade Organization in demanding the trade needs of Africa. He further adds that they are also making efforts to resist the attempt by Chinese traders to dominate the informal economic sector. However, they are losing the battle due to the massive amounts of debts from the IMF and Chinese countries. The growing debts make African countries vulnerable to economic exploitation.

There are also other challenges which are not highlighted in this paper. As a result, African governments have a vital role to play in African trade with an objective of advancing the economic strength of Africa in the global market. Strong economic growth in Africa requires greater political instability of African nations, strong demand for raw materials and rising prices and also improved macroeconomic policies and structural formation which offers an improved business environment for small and medium-sized enterprises.

Industrial Development in Africa

History suggests that in the 1960's, there were high hopes for the newly independent African states regarding economic development. During this time, Africa had much economic potential than Asia. For instance, Zambia had a GNI per capita of $432, and Malaysia had $392 (Fine, 2018). It means that Zambia's economy was better off than Malaysian and the same applies to other African countries. Most of the African countries embarked on ambitious industrial projects with an objective of reducing levels of economic dependence from the foreign countries. Governments invested hugely on large scale and capital-intensive manufacturing industries. These were the strategies for protecting locally manufactured products from the...