Get premium membership and access questions with answers, video lessons as well as revision papers.

Intra-Africa trade is termed to be of great need. Validate this statement by giving reasons.

      

Intra-Africa trade is termed to be of great need. Validate this statement by giving reasons.

  

Answers


Francis
Foreign exchange earning: trade provides foreign exchange which can be used to remove the poverty and other productive purposes.

Market expansion: The demand factor plays very important role in increasing the production of any country. The intra-Africa trade expands the market and encourages the producers.

Increase in investment: intra-Africa trade encourages the investor to increase the investment to produce more goods. So the rate of investment increases.

Foreign investment: Besides the local investment, intra-Africa trade provides incentives for the foreign investors to invest in those countries where there is a shortage of investment.

Increase in national income: intra-Africa trade increases the scale of production and national income of the country. To meet the foreign demand we increase the production on large scale so GNP also increases.

Decrease in unemployment: With the rise in the demand of goods domestic resources are fully utilized and it increases the rate of development in the country and reduces the unemployment in Africa.

Price stability: intra-Africa trade helps to bring stability in price level. All those goods which are short and prices are increasing can be imported and those goods which are surplus can be exported. There by stopping fluctuation in prices.

Specialization: There is a difference in the quality and quantity of various factors of production in different countries. Each country adopts the specialization in the production of those commodities, in which it has comparative advantage. So all trading countries enjoy profit through international trade.

Remove monopolies: intra-Africa trade also discourages the monopolies. Where every any monopolist increases the prices, government allows the import of goods to reduce the prices in the country.

Removal of food shortage: Africa is also facing the food shortage problem. To remove the food shortage India has imported the wheat many times. So due to foreign trade we are solving this problem for many years.

Agricultural development: Agricultural development is the back bone in our economy. Intra-Africa trade will play very important role for the development of our agriculture sector. Every year we export rice, cotton, fruits and vegetables to other countries. The export of goods makes our farmer more prosperous. It inspires the spirit of development in them.

To improve quality of local products: intra-Africa trade helps to improve quality of local products and extends market through changes in demand and supply as foreign trade can create competition with the rest of the world.

External economics: External economics can also be achieved through intra-Africa trade. The industries producing foods on large scale in Pakistan and India are enjoying the external economics due to international trade.

The world peace: Today all the countries are tied in trade relations with each other. So intra-Africa trade also contributes to peace and prosperity in the world.

Better understanding: intra-Africa trade provides an opportunity to the people of different countries to meet, discuss, and exchange views and ideas related to their social, economic and political problems.

Interdependence: intra-Africa trade is responsible for creating economic depending and establishing economic interest in the economy of the countries having trade relations.
francis1897 answered the question on January 12, 2023 at 13:28


Next: Discuss the major programmes to improve African trade
Previous: Kwa kutaja mifano mitano kutoka kwenye hadithi, Eleza ni kwa nini hadithi hii ikapewa anwani ya “Fadhila za punda’’

View More Geography of Africa Questions and Answers | Return to Questions Index

Related Questions