WEST AFRICA – AN EXPORT OPPORTUNITY FOR U.S. AGRIC GOODS?

 

WEST AFRICA – AN EXPORT OPPORTUNITY FOR U.S. AGRIC GOODS?

THIS MORNING, I SAW AN INTERESTING BANNER HEADLINE IN THE “NEW DAY” PROGRAMME OF TV 3 GHANA. IT SAID THAT THE U.S.A. IS EXPLORING OPPORTUNITIES TO MAKE WEST AFRICA AN EXPORT OPPORTUNITY FOR AGRICULTURAL PRODUCTS. IT SOUNDS A LITTLE BIT RIDUCULOUS – A SIMPLE COMMENT.

WHICH AGRICULTURAL PRODUCTS DOES WEST AFRICA NEED FROM THE U.S.A. THAT THE REGION CANNOT PRODUCE ON ITS OWN? IN MY OPINION, THE WEST AFRICAN REGION CAN GROW ALL THE FOOD IT NEEDS BY ITSELF. AGRICULTURAL PRODUCTS THAT THE REGION CANNOT GROW – WHAT WOULD THAT BE? – ARE SURELY NOT NEEDED HERE.

AS WE WILL SEE, THE REASON WHY THE U.S. GOVERNMENT IS LOOKING NOW FOR NEW EXPORT DESTINATION FOR THEIR FOOD STUFF IS TWOFOLD.

AT THE MOMENT, THE U.S. AMERICAN AGRICULTURAL SECTOR IS SUFFERING A LOT. THIS IS MAINLY BECAUSE OF THE ONGOING UNCERTAINTY CAUSED BY THE U.S. – CHINA TRADE WAR, INITIATED BY THE U.S. ITSELF. BUT, A SECOND IMPORTANT ROLE IN THIS SCENARIO PLAYS UNFRIENDLY WEATHER CONDITIONS. OTHER REASONS ALSO PLAY A ROLE, ALBEIT A LITTLE SUBORDINATE ONE.

ACCORDING TO THE TODAY’S “CALEB” COLUMN ON http://www.investopedia.com THE BANKRUPTCY RATE AMONG U.S. FARMS HAS RISEN 24% YEAR-TO-YEAR. THE AVERAGE FARM INCOME HAS RISEN IN THE U.S.A. YEAR-TO-YEAR. BUT 40% OF THIS INCOME IS BASED ON DESASTER RELIEF, ETC. THEREFORE, ONLY 60% OF THIS IS BASED ON OPERATIONAL INCOME.

ALREADY FROM THIS YOU CAN SEE THAT IT IS NECESSARY FOR THE U.S.A. TO LOOK FOR OTHER MARKETS. THE BREAKDOWN OF THE U.S.-CHINA TRADE – PROBABLY FOR A LONGER TIME – MAKES THAT NECESSARY.

FURTHER, THE SECOND REASON IS SURELY CONNECTED TO THIS. THE “AMERICA FIRST” IDEOLOGY OF THE CURRENT U.S. PRESIDENT LEADS TO WHAT I CALL “ECONOMICAL FASCISM”. THE CURRENT AMERICAN GOVERNMENT WILL DO EVERYTHING TO PUSH ITS OWN AGENDA. THIS HAPPENS WITHOUT LOOKING AT THE CONSEQUENCES IT MIGHT HAVE ON OTHER COUNTRIES.

THEREFORE, THE PROTECTIONIST POLICY OF THE AMERICAN GOVERNMENT LEADS MORE AND MORE TO THE NEAR-COLLAPSE OF OTHER ECONOMIES. THIS YOU CAN SEE LOOKING AT THE EFFECT THIS POLICY HAS ON THE GERMAN AUTO INDUSTRY. THE TRADE WAR LED TO A LESSER EXPORT OF CARS TO CHINA AND OTHER COUNTRIES AFFECTED BY IT.

THEREFORE, GHANA BE CAREFUL AND AFRICA BE CAREFUL. YOU SURELY DON’T NEED AS MANY AGRICULTURAL PRODUCTS AS THE U.S. GOVERNMENT WANTS TO PUSH ON YOU.

BUT THAT DOESN’T MEAN TO STOP ANY TRADE RELATIONS WITH THE UNITED STATES OF AMERICA. IT ONLY MEANS TO BE CAREFUL NOT TO BE EXPLOITED BY ANY SELFISH AGENDA OF THAT COUNTRY. INSTEAD, USE THE OPPORTUNITIES THE AfCFTA  WILL GIVE YOU, AND INCREASE THE INTER-AFRICAN TRADE.

IN THE COMING WEEKS, I WILL PUBLISH MORE POSTS ON THE ADVANTAGES ON AfCFTA. ADDITIONALLY, I WILL PUBLISH A MORE EXTENSIVE RESEARCH ON AfCFTA ON http://www.publisher.ghanaresearch.org

STAY TUNED!

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