Can Africa afford free trade? Liberalisation, industrial change and prosperity don't always mix

Abstract

Trade liberalisation involves the lifting of currency restrictions, import controls and other barriers to free trade. It has been widely hailed by economic advisors in the World Bank and IMF as a 'quick fix' capable of reviving industrial development by attracting inward investment and spurring the modernisation of industrial technology. Many economists and policymakers have adopted these axioms. A consortium of UK and African researchers co-ordinated by Queen Elizabeth House, Oxford has questioned whether liberalisation merits its star billing. Focusing attention on the garment and engineering industries of Kenya, Tanzania and Zimbabwe, they found many complex factors lie behind technology and export development. If implemented too hastily or clumsily, liberalisation could easily do more harm than good.