Mercantilism In Africa

Nations engage in international trade because they benefit from doing so. The gains from trade arise because trade allows countries to specialise their production in a way that allocates all resources to their most productive use. Trade plays an important role in achieving this allocation because it frees each and every country’s residents from having to consume goods in the same time combination in which the domestic economy can produce them.

During the past decade, China’s growing presence in Africa has increasingly become a topic for debate in the international system and among economists as well as policy analysts. China’s presence in Africa and its relations with African countries is primarily driven by economic interests and practical

The author argue that China-Africa trade does not improve and sustain the living conditions of African residents, instead is it damaging efforts for Sub-Saharan Africa to improve their development. Lyons and Brown states that the increasing number of imports from China affect local businesses because China import cheap products and sell them at a lower price. Therefore, there is a competition, and this competition lowers the profit margins and income for some trader. As a result of this the African traders lose their businesses as their consumer go for Chinese products. The author also address the benefits of China imports to Africa. These benefits include having access to afford the cheap products from China especially by the poor people since they are not able to afford expensive products and

Instead the China-Africa trade has brought some impact on Africa’s market traders and also contributed to poverty. Mercantilism is failing Africa, particularly the SSA. Most of African states are still poor and majority of their citizens still lives in poverty. The trade between China and African is not mutually beneficial, because African states benefit less while China benefit most.

Another things that made African states not to benefit most in the trade is that, they export raw material or minerals because they lack means to process those raw material into finished goods and services. Therefore, those raw materials that are being exported, the African states import them back as manufactured and finished goods and they import them at higher cost compared to the profit they received when exporting