South-South Trade and Investment : The Good, the Bad and the Ugly — African Perspectives

In the last two decades, the world economy has seen a shift in intercontinental trade from "North-South" interactions between developed northern hemisphere nations and the less developed southern hemisphere nations, to "South-South" interactions between developing countries. This projects an optimistic future for developing economies. The economies of African nations will have room for expansion, access to new markets, and opportunity for gains in efficiency and specialization. They will be freed from over-dependence on Northern Markets and can focus on self-sustainability. Africa’s role in south-south trade and investment could present the opportunity African nations need to reduce poverty and improve their economic standings. However, a lack of pan-African coordination could result in the marginalization of smaller African nations. Also, since most foreign interest in African markets is for primary sector commodities, a nation’s market may be reduced to an exporter of raw materials. This limits the technological or industrial reform these nations need. African nations face many perils because of instability and internal divides, but there are strategies and responses that emerging economies can use to protect themselves. The African nations can unite to prevent the marginalization of smaller nations. Also, if African-Small Nation investments targeted consumer products for Asian and Western markets, exploitations by developed nations could be avoided. Strengthening regional trade, identifying priority markets, and redirecting civil society groups would also promote healthy South-South interactions. Promoting African nations in the global economy will benefit Africa and could create greater balance in the global economy