Economics of Africa

Specialization & Trade in Africa

by Dejuener Rideau

​Trade is Essential

​Today, nearly every country is part of the global economy. Nations around the world trade with each other for goods, services, and resources. Not only is trade essential, it also helps economies grow and thrive. In fact, trade between nations is beneficial to both buyers (consumers) and sellers (producers) within a country.

​African Exchange

​Many African countries specialize in growing a particular crop or in mining for a specific mineral resource. As a result, trade is especially important in Africa.

​​African Exchange

​​Shipments of crops, raw minerals, and animal products are a vital source of income for Africa's developing economies. Then, African nations import the goods and services that they need, such as a variety of food products, computer technology, and industrial equipment for manufacturing.

Open Ended

Problem - Solution:

Coffee drinkers prize Ethiopian coffee, and tea drinkers enjoy African red tea. However, neither of these products can be grown in the United States. But, the United States can manufacture computer and medical equipment, which African countries are unable to produce. Explain how trade could benifit these countries.

​Predict Possible Outcomes

​Some economies are overly specialized. Becoming too dependent on one particular good or service can cause potential problems.

​

Look at the graph and answer the next questions.

Open Ended

Nigeria over-specializes in the production of which good?

Multiple Choice

Rather than burn coal and oil, many countries invest in renewable energy, such as solar power and hydroelectricity. How might this trend impact Nigeria's economy in the future?

*Note: Take into account what Nigeria specializes in.

• It will have no effect on Nigeria's economy.

• Agriculture and foodstuffs could become less important.

• Nigeria's economy could grow as demand for oil increases.

• Less demand for oil worldwide could hurt Nigeria's economy.

​Roadblocks to Trade

​Currently, there are many roadblocks to trade in Africa. One problem is that many African nations place high tarrifs on goods imported from neighboring African nations. Tariffs act to keep out competition and give the country's own businesses an advantage. As a result, trade among African nations is lower than elsewhere in the world.

​Quota

​Trade barriers are also used to restrict trade from non-African nations. For example, in 2007, South Africa placed strict quotas on the amount of Chinese textiles entering the country. These quotas raised the overall price of textiles and protected South Africa clothing businesses from foreign competition.

​Embargoes

​In some cases, countries in Europe, Asia, and the Americas have placed embargoes on specific African nations. For example, during the apartheid era in South Africa, the United States and many nations in Europe refused to trade with South Africa, They hoped an embargo on trade would force South Africa's Government to end apartheid and give equality to its non-white citizens

Multiple Choice

The United Nations has forbidden the importing of weopons into Africa. This is an example of which trade barrier.

• Tariff

• Quota

• Embargo

• Rights

Multiple Choice

To give its farmers an advantage, Nigeria has placed a high tax on imported rice. This is an example of which trade barrier.

• tariff

• quota

• embargo

• Null

Multiple Choice

If the United States limited the amount of cocoa that U.S businesses can import from West Africa. This is an example of which trade barrier.

• tariff

• quota

• Embargo

• Sheep