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Are Manufacturing Exports the Key to Economic Success in Africa?

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  • M�ns S–derbom
  • Francis Teal

Abstract

The poor performance of many African economies has been associated with low growth of exports in general and of manufacturing exports in particular. The two most successful countries in Africa have been Botswana and Mauritius. In Botswana, rapid export growth followed the discovery of diamonds; in Mauritius, manufacturing exports played a major role. In this paper we draw on both macro and micro evidence from nine African countries to investigate whether manufacturing exports are the key to success in Africa. We do this by posing three questions. First, how close is the link between export and income growth? Second, is there evidence from these African countries that manufactured exports have led to greater economic success? Third, what has limited the success of firms in the manufacturing sector? We argue that export and income growth are very closely linked. However, there is, for this sample of countries, no evidence that if their exports are manufactures, growth rates are higher. We show that the factors that limit the success of African manufacturing firms in exporting are their levels of efficiency and small size. We argue that the key to success in an area where Africa has a potential cost advantage -- labour-intensive garments -- is to enable large firms to use a more labour-intensive technology than is the case at present. Copyright 2003, Oxford University Press.

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Bibliographic Info

Article provided by Centre for the Study of African Economies (CSAE) in its journal Journal of African Economies.

Volume (Year): 12 (2003)
Issue (Month): 1 (March)
Pages: 1-29

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Handle: RePEc:oup:jafrec:v:12:y:2003:i:1:p:1-29

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Cited by:
  1. Coxhead, Ian A. & Foltz, Jeremy D. & Mogues, Tewodaj, 2012. "Does freer trade really lead to productivity growth? Evidence from Sub-Saharan Africa," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124958, Agricultural and Applied Economics Association.
  2. Hoekstra, Ruth, 2013. "Boosting Manufacturing Firms' Exports? The role of trade facilitation in Africa," IEE Working Papers 197, Institut fuer Entwicklungsforschung und Entwicklungspolitik, Ruhr-Universitaet Bochum.
  3. Alan Harding & Måns Söderbom & Francis Teal, 2004. "Survival and Success among African Manufacturing Firms," CSAE Working Paper Series 2004-05, Centre for the Study of African Economies, University of Oxford.
  4. Andrew Mold and Annalisa Prizzon, 2010. "Fragile States, Commodity Booms And Export Performance: An Analysis Of The Sub-Saharan African Case," RSCAS Working Papers 2010/21, European University Institute.
  5. Jörg Mayer & Pilar Fajarnes, 2005. "Tripling Africa´S Primary Exports: What? How? Where?," UNCTAD Discussion Papers 180, United Nations Conference on Trade and Development.
  6. Neil Rankin & M�ns Söderbom & Francis Teal, 2006. "Exporting from Manufacturing Firms in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(4), pages 671-687, December.
  7. Clarke, George, 2012. "Manufacturing firms in Africa: Some stylized facts about wages and productivity," MPRA Paper 36122, University Library of Munich, Germany.
  8. Boermans, Martijn Adriaan, 2010. "Learning-by-Exporting and Destination Effects: Evidence from African SMEs," MPRA Paper 22658, University Library of Munich, Germany, revised 09 May 2010.
  9. Francis Teal & Alan Harding & Måns Söderbom, 2004. "Survival and Success among African Manufacturing Firms," Economics Series Working Papers WPS/2004-05, University of Oxford, Department of Economics.
  10. World Bank, 2007. "Uganda - Moving Beyond Recovery, Investment and Behavior Change, For Growth, Volume 2, Overview," World Bank Other Operational Studies 7574, The World Bank.
  11. World Bank, 2007. "Cape Verde Investment Climate Assessment," World Bank Other Operational Studies 12305, The World Bank.
  12. World Bank, 2007. "Uganda - Moving Beyond Recovery : Investment and Behavior Change, For Growth, Volume 1. Summary and Recommendations," World Bank Other Operational Studies 7576, The World Bank.
  13. Yoshino, Yutaka, 2008. "Domestic constraints, firm characteristics, and geographical diversification of firm-level manufacturing exports in Africa," Policy Research Working Paper Series 4575, The World Bank.
  14. World Bank, 2007. "An Assessment of the Investment Climate in Botswana : Volume I, Main Report," World Bank Other Operational Studies 7093, The World Bank.
  15. John Page, 2010. "Working Paper 102 - Seizing the Day? the Global Economic Crisis and African Manufacturing," Working Paper Series 238, African Development Bank.
  16. World Bank, 2007. "Zanzibar - The Effect of the Investment Climate on Performance of Micro and Small Enterprise in Zanzibar : A Comparison with Mainland Tanzania and Other Countries," World Bank Other Operational Studies 7708, The World Bank.
  17. Clarke, George R.G., 2005. "Beyond tariffs and quotas : why don't African manufacturers export more?," Policy Research Working Paper Series 3617, The World Bank.
  18. Sarpong, Daniel Bruce & Wolf, Susanna, 2008. "Export Performance and Investment Behaviour of Firms in Ghana," Proceedings of the German Development Economics Conference, Zurich 2008 46, Verein für Socialpolitik, Research Committee Development Economics.
  19. World Bank, 2007. "An Assessment of the Investment Climate in Botswana, Volume 2. Detailed Results and Econometric Analysis," World Bank Other Operational Studies 7747, The World Bank.

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