False Economy - Alan Beattie [111]
Now, no one who has seen the way in which the cocaine trade has poisoned the society and politics of a country like Colombia would ever seriously suggest that growing cocaine for export would be a good move for Africa. But there are plenty of legitimate exports for which bringing more of the value chain inside Africa would help in reducing poverty. One is coca's high-altitude companion, coffee. Africa exports lots of raw green coffee beans but makes relatively little roasted and ground, or instant, coffee itself. The same is true of cocoa: Africa has the world's two biggest growers of cacao, Ghana and Cote d'lvoire, but the vast majority of their product is exported as raw green beans.
Andrew Rugasira, a Ugandan entrepreneur who started the Good African brand of roasted coffee, which has now found its way into British supermarkets, says that until he made them coffee to drink, some of the farmers from whom he buys his beans had literally no idea what the funny little things they were growing were used for. Some thought they were bullets used by guerrilla armies in the ongoing conflict in the neighboring Democratic Republic of Congo. At this point they had been growing coffee for decades.
Searching for explanations, let us first rule out as a major reason the widespread but largely erroneous idea that trade policy is used to keep Africa poor. Import tariffs and subsidies can distort trade mightily, as we saw in the previous chapter, but these days they aren't a big deal for Africa.
It is widely believed that all rich countries impose tariffs on manufactured products from Africa but not on raw materials. One particular story that gets a good deal of play is that the European Union lets in cocoa beans tax-free from Ghana but taxes imports of Ghanaian chocolate. Unfortunately, that is completely wrong. Because Ghana used to be a colony, it benefits from the special trade deal with Europe we encountered in the last chapter. Chocolate from Ghana enters the EU duty-free. Among the institutions and people I have heard or seen propagating this myth (and who should know better) are: former British prime minister Tony Blair; the development campaign Oxfam; the UK's Department for International Development (which ended up having to pulp a large run of leaflets after the European Commission complained about the inaccuracy); the United Nations in its annual Human Development Report; and, astonishingly enough, Alan Kyerematen, then Ghana's trade minister.
The real reason Ghana doesn't export more than a small amount of expensive, high-quality chocolate is that it is prohibitively expensive to do business there. It doesn't help that it's really hot in Ghana and that chocolate melts in the heat: maintaining a refrigerated, or at least cooled, unbroken chain from factory to truck to port to ship—all the way to Rotterdam—is expensive. The refrigeration excuse, though, doesn't hold for coffee in Uganda or Ethiopia. There, the absence of more than the basic earliest stage of the supply chain is attributable simply to the fact that the expertise, the finance, and the logistics aren't there to do it.
This is the stuff that really matters. A survey of villages in Uganda found that there was a clear link between access to logistical services like district markets, trucking companies, and wholesale buyers, and the likelihood of a village producing export crops—coffee, tea, cotton, fruits, or flowers. And despite the concerns sometimes expressed about the dangers of farming for export rather than home consumption, villages producing such crops had lower rates of poverty than those that grew maize or bananas to eat themselves.
Ten of the more extraordinary days of my life were spent traveling around Africa in 2002 with the rock star Bono and then U.S. Secretary of the Treasury Paul O'Neill. When Bono and O'Neill talked to Africans, among the most consistent complaints