Equitable and sustainable structural transformation of African economies is a prerequisite for improving livelihoods across the continent. Despite decades of reform often led under structural adjustment programmes, and a very high level of openness, most sub-Saharan African countries remain highly dependent on a narrow range of mineral and agricultural commodities, with low levels of value-addition and low potential for job creation. Africa’s share of world trade has declined from 5.5 per cent in 1980 to 2 per cent in 2003, and of this trade there is an overwhelming dependency on trade with the EU (European Union). Stimulating growth that enhances welfare, creates quality employment, and fulfils social and economic rights requires holistic economic policies and the political space and financial means to implement them - at national and continental levels. These policies need to reflect the aspirations and values of all sectors of society and to further regional integration and a process of sustainable agricultural reform and industrialisation. As one of Africa’s leading economic partners, in terms of trade and investment, as well as wider financial support through aid finance, the EU could play an important and significant role in supporting holistic and equitable economic transformation across Africa.

REGIONAL TRADE AGREEMENTS

Trade policies have a critical role to play in supporting economic development across Africa. These policies are increasingly set through agreements in international arenas. Whilst the World Trade Organisation has set trade rules that have implications for African countries, it is a new generation of bilateral/regional trade and investment agreements that will critically determine the types of trade and wider economic policies that governments can use to support development. The ongoing negotiation of Economic Partnership Agreements (EPAs) between African, Caribbean and Pacific (ACP) countries and the EU will have a decisive impact on the trade and economic policies of African countries. For most African countries, the EU is the single most important trade partner and thus any agreement with the EU will have substantial implications. The EU’s current EPAs’ proposal are in danger of undermining the very policies that African countries require to promote regional integration and transformation of their economies. There are widespread and justified fears that the configuration of the EPA negotiating blocs will undermine rather than promote aid effectiveness.