Trade in Africa



Trade in Africa

Africa is a continent with many different physical features, such as the Sahara Desert and rainforest. These natural traits may prevent trade with other countries. A trade barrier is anything that makes trade more difficult. The Sahara and the rainforest are examples of natural trade barriers. Moving goods across these areas is difficult.

Egypt and West Africa are wealthy regions of Africa. Egypt has been a hub for trade for tens of thousands of years. West African countries have access to the ocean. South of the Sahara, the thick forest and desert make trade difficult. Nature isolates central and southern Africa. Not until the introduction of the camel to the region in the 10th century did crossing safely through the desert become possible.

From the 8th century to the 16th century, routes across the desert to the Mediterranean countries were a major source of trade for Africans. This trans-Saharan trade was characterized by the exchange of gold for salt. When Europeans began trading with Africa, trans-Saharan trade dropped. Europeans began to use water routes for trade, which was easier. Some trans-Saharan trade still goes on today. Water routes are now the main source of trade in the region.

Trade routes like the Incense Route and the King’s Highway connected the regions of present-day Iran and Iraq to places in northern Africa. Egypt was vital to the spice trade because it is in North Africa, close to the Middle East. The busy Mediterranean seaport of Alexandria is also in Egypt. This aided trade with the Mediterranean region.

Arab nations built a trade route along Africa’s eastern coast. Ivory and slaves were then carried across the Indian Ocean from Africa to Asia. There was a high demand for trade between Asia and Africa in the 1950s. Trade increased between the two regions because World War II hurt Europe and Asia’s economies. Raw materials from Africa were in high demand. Asia still imports many goods from Africa today.

Africa is a continent rich in minerals. Diamonds in South Africa and oil in Nigeria are just a few of the rich natural resources. The rainforest may have made trade difficult in the past, but now it is a source of income. West Africa now exports lumber harvested from the rainforests.

Currency

Every country has a different kind of currency, or monetary system. Some examples of African money are the Egyptian pound, the South African rand, the Nigerian naira, and Chad’s franc.

An exchange rate is the price that one country’s currency has compared to another country’s currency. For example, one US dollar is worth over one hundred Nigerian naira. Without an exchange rate, global trade would be impossible to conduct. Exchange rates change daily. The changes are based on factors like government stability and the strength of a country’s economic market.

Economic Organizations.

Economic growth in Africa has stalled since the 1960s. Sometimes many countries work together to improve the economy. They make agreements to boost cooperation in a given region. Their goals are to create financial growth and to help the African economy. Nine southern African countries came together in 1980 to form a treaty. The Southern African Development Community (SADC) assists in making government and monetary policies for countries that are members. Five new countries have joined since 1980. The member states include Angola, Zimbabwe, and South Africa, among others. The group promotes economic development. Many Africans states are trying to lower their poverty rates. Poverty is the condition of having little or no money. By working together, these countries hope to build southern Africa financially.

Sixteen West African countries made a pact in 1975. They signed a treaty hoping to promote strength in the region. The Economic Community of West African States (ECOWAS) was formed in order to join together and develop the economies of member states. Their goal is to raise the standard of living and stability in the region.

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