Environment
Africa's export structure in a comparative perspective
Authors:
A. Wood; J. Mayer; Institute of Development Studies (IDS) UK; UNCTAD
Publisher:
Institute of Development Studies, Sussex, UK, 1998
Africa's exports are concentrated on primary products, mainly unprocessed, in sharp contrast to the exports of East Asia, which consist predominantly of manufactures. It has often been suggested that this difference in export structure has contributed to the dramatic difference between the growth performance of these two regions over the past two decades, and that if Africa were to adopt the same trade policies as East Asia, it too would experience rapid export-oriented industrialisation.
The paper considers another explanation of the difference in export structure between Africa and other developing regions, which is that it arises not from differences in trade policies, but from differences in supplies of human and natural resources. In particular, the statistical analysis in the paper shows that the concentration of Africa's exports on unprocessed primary products is caused largely by its combination of low levels of education and abundant natural resources, relative to the rest of the world. There is wide diversity among the individual countries of Africa, one-third of which have considerable potential to export manufactures, largely unrealised at present. But even in the future, with more education, improved infrastructure and better policies, the share of manufactures in exports will remain far lower in Africa than in Asia, which has fewer natural resources.
The implication of the paper for trade strategy is thus that the way forward for Africa in the medium term lies mainly in raising the level of its primary exports, processed and unprocessed, following a long-term development path more like that of nattural-resource-abundant America than of natural-resource-scarce Asia. Progress down this path will require not only stable macroeconomic policies, and more investment in education and infrastructure, but also active microeconomic policies. The measures needed to increase primary exports - diversification of product mix and improvement of production and marketing methods, achieved through research, training and more business contacts with the rest of the world - will also stimulate the demand for skilled workers, enabling Africa to break out of the low-skill low-trade equilibrium in which it is currently trapped. [author]
