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For African countries, innovation must trump our focus on trade


Africa is overwhelmingly the poorest region in the world. In 2015, after more than a decade of the “Africa Rising” narrative, the region’s GDP was around $1.6 trillion, barely 2% of global GDP. The same year, Africa (including North Africa) attracted $38 billion in Foreign Direct Investment (FDI), again just over 2%of global FDI, which was $1.7 trillion. On the issue of trade, Africa did not fair much better; the continent is responsible for just 3% of the $18 trillion worth of global trade.

Considering Africa’s lackluster performance, it is no coincidence that many African countries and global development institutions are now prioritizing a strategy of trade over aid. But what if focusing on trade—such as partnerships with Chinese and American governments and companies—is the wrong way to look at the problem? What if instead, African countries focused on innovation? The opportunities for growth and prosperity would be much brighter.

The Problem With Trade

Consider how Africa has fared over the past 15 years from the Africa Growth and Opportunity Act (AGOA). A non-reciprocal trade deal signed into law by president Bush in 2000 and further extended by president Obama in 2015, AGOA provides duty-free and quota-free treatment to about 7,000 products exported from eligible African countries to the US.


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