Commerce With Africa

INTRODUCTION

Africa in july 2005 is composed approximately by 887 millions people living in 54 different states.

Africa is the world’s poorest inhabited continent, and it is, poorer than it was 25 ears ago.

It has (and in some ways is still having) an uncertain transition from colonialism. The cold war has increased the corruption in Africa; it is moreover the major factors to its poor economic situation. In contrast to the rapid growth in South America, which has lifted millions beyond subsistence living, Africa has stagnated. It has even gone the wrong way in terms of foreign trade, investment, and per capita income. This poverty has widespread effects, including low life expectancy, violence, and instability in this continent. Over the decade there have been many attempts to improve the economy of Africa with very little success.

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1. COMMERCE OF NATURAL RESOURCES IN AFRICA

1.1. History

The African history is composed in 3 parts:

Beginning

In the 15th century, Portuguese traders circumvented the Saharan trade route and began to trade directly with Guinea. Other European traders followed, rapidly boosting prosperity in Western Africa. States flourished, including the Kingdom of Benin, Dahomey, and the Ashanti Confederacy. Loose federations of city states such as those of the Yoruba and Hausa were common. However, this wealth was principally based on the slave trade, which collapsed following the abolition of slavery and later European colonization.

Although Europeans were ostensibly committed to developing their colonies, colonial rulers employed a laissez-faire strategy during the first decades. It was hoped that European companies would prosper if given a secure operating environment. This only occurred in a few areas with rich resources; the colonial economies hardly grew from the 1890s through the 1920s. The colonies had to pay their own way, receiving little or no development money from Europe. Only in the 1930s, with the rise of Keynesian economics, did the colonial administrations seriously encourage development. However, new projects could not transpire until after the Great Depression and the Second World War.

After Second World War

African economies boomed during the 1950s as growth and international trade multiplied beyond their pre-war levels. The insatiable demand for raw materials in the rebuilding economies of Asia and Europe and the strong growth in North America inflated the price of raw materials. By the end of the colonial era in the 1960s, there was great hope for African self-sufficiency and prosperity. However, sporadic growth continued as the newly independent nations borrowed heavily from abroad.

Nowadays

The world economic decline of the 1970s, rising oil prices, corruption, and political instability hit Africa hard. In subsequent decades Africa has steadily become poorer compared to the rest of the world; South America experienced solid growth, and East Asia spectacular growth, during that same period. According to the World Economic Forum, ten percent of the world's poor were African In 1970; by 2000, that figure had risen to fifty percent. Between 1974 and 2000 the average income declined by $200. Beginning in 1976, the LomÐ"© agreements and Cotonou agreement between the EU and ACP countries, including Sub-Saharan Africa, have structured economic relations between the two regions.

1.2. The African debt

1.3. Resources of Africa

Today Africa is the eighth of the world’s population. The most populated areas are along the niles, niger, congo and Senegal rivers.

The population is growing quickly due to increasingly better health care. Birthrates are very high, and families are often large. Many people have moved from countryside to cities, because of the poverty and lack of work, to escape civil wars, droughts, and famines.

Most countries rely on the export of coffee, cocoa, or oil. In recent yeas, the prices have fallen. The amount that African countries earn from exports is often less then what they have to spend on imports. These factors, along with the growing population and effects of wars and droughts, mean economic difficulties for many African countries.

Africa is the continent that has almost all the world's reserves of the scarcest and most precious minerals, the platinium group minerals: platinium, palladium, rhodium, ruthenium, iridium, and osmium. They are used in minute amounts in electronic and space-age materials, medical instruments, and other high precision devices. Africa produces more than 60 metal and mineral products and is a major producer of several of the world’s most important minerals and metals including Gold, PGE’s, Diamonds, Tantalite, Titanium, Uranium, Manganese, Chromium, Nickel, Bauxite and Cobalt. Africa's contribution to the world's major metals (copper, lead and zinc) is less than 7%. As a result silver production is low (less than 3% of the world's production) due to the fact that most silver is produced as a by product of lead; zinc and copper mining. Although underexplored, Africa hosts about 30% of the planet's mineral reserves, including 40% of gold, 60% cobalt and 90% of the world's PGM reserves, making it a strategic producer of these precious metals.

Angola: Petroleum, Diamonds, Manganese, Uranium, Gold

Congo: Wood, Petroleum, Surgar, Cocoa, Coffee, Diamonds

Ivory coast: Coffee, Cocoa, Banana, Cotton, Fish

Tanzanie: Cotton, Coffee, Manufactured Goods, Tobacco

South Africa: Gold, Diamonds, Metals, Minerals

2. EXEMPLE OF DEMOCRATIC REPUBLIC OF CONGO

Introduction:

This example has been compiled to provide an overview of the resource governance exploitation issues in the DRC. This part begins by looking back to the late 1800s and tracing the development of resource extraction patterns and informal trade in resources through Leopold and Belgian colonial rule, to Mobutu, and to Laurent and Joseph Kabila.