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Agricultural Export Performance in Africa: Elements of comparison with Asia

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  • Floribert Ngaruko
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    Abstract

    This study addresses the strategies and the factors of agricultural export performance in Africa compared with other regions, especially Asia. Regarding the figures of agricultural export performance across these regions, the study finds that agricultural export commodities, either primary or processed, are less diversified in sub-Saharan Africa as compared to Asia, but that diversification evolves more favorably in Africa compared to Asia for primary, as opposed to processed, agricultural exports. The paper also finds sharp sub-regional differences: CFA economies’ agricultural exports are less diversified than those of non-CFA economies. Also, diversification dynamics are found to be less favorable in the CFA zone, but CFA economies appear to shift relatively more rapidly from primary towards processed commodity exports. The study then investigates the extent to which the underlying strategies conform to international commodity price incentives. It confirms such conformity for primary commodities for Latin America and the Caribbean, followed by sub-Saharan Africa. As regards processed commodities, sub-Saharan Africa is found to have the best track record, followed by Latin America and the Caribbean. The study finds that Asian commodities have the most unfavorable structure, but that this structure improves the fastest. The study also analyzes the extent to which different strategies are complementary or substitutable. The findings support the hypothesis of complementariness relatively more so than that of substitutability, as if the line of demarcation separated good and poor performers more clearly than the specific strategies in which they perform, but the most dominating feature is the looseness of the relationship among different strategies. To explain African versus Asian differences, a succinct review of the factors of performance in Asia and a discussion of their relevance for Africa is carried out. Thus, while human and physical capital is generally found to have played a central role in Asian export promotion, this study argues that these factors are not what make the difference with Africa in the first place. Likewise, this paper argues that neither macroeconomic stability, nor international market imperfections a make notable difference. A regression-based exercise shows that the impact of these factors on performance is subject to the quality of governance, thus suggesting that institutions are the decisive factor that determines performance in the first place. To support this view, the paper proposes two contrasted African case studies – Burundi versus Uganda –, which suggest that the interactions between biased distributive politics and export policies are responsible for a large part of the African export counter-performance. Accordingly, the study argues that addressing institutions prior to, or at least along with, other efforts seeking to improve the macroeconomic environment and to liberalize and deregulate the economy is a requirement for African countries to significantly improve their agricultural export performance.

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    Bibliographic Info

    Paper provided by Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA) in its series Working Papers with number 03-09.

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    Length: 49 pages
    Date of creation: 2003
    Date of revision:
    Handle: RePEc:fao:wpaper:0309

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    Related research

    Keywords: Africa; Agricultural economics; Agricultural products; Asia; Balance of trade; Case studies; Commodity markets; Diversification; Economics; Export policies; Exports; Incentives; International trade; Prices; Terms of trade;

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    References

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    1. Francis Teal, 1999. "Why Can Mauritius Export Manufactures and Ghana Not?," The World Economy, Wiley Blackwell, vol. 22(7), pages 981-993, 09.
    2. Dani Rodrik, 1994. "Getting Interventions Right: How South Korea and Taiwan Grew Rich," NBER Working Papers 4964, National Bureau of Economic Research, Inc.
    3. Francis Teal, 1999. "Why can Mauritius export manufactures and Ghana not?," Economics Series Working Papers WPS/1999-10, University of Oxford, Department of Economics.
    4. Gibbon, Peter, 2001. "Upgrading Primary Production: A Global Commodity Chain Approach," World Development, Elsevier, vol. 29(2), pages 345-363, February.
    5. Balassa, Bela, 1990. "Incentive policies and export performance in sub-Saharan Africa," World Development, Elsevier, vol. 18(3), pages 383-391, March.
    6. Wood, Adrian & Mayer, Jorg, 2001. "Africa's Export Structure in a Comparative Perspective," Cambridge Journal of Economics, Oxford University Press, vol. 25(3), pages 369-94, May.
    7. Gersovitz, M. & Paxson, C.H., 1990. "The Economies Of Africa And The Prices Of Their Exports," Princeton Studies in International Economics 68, International Economics Section, Departement of Economics Princeton University,.
    8. Ahluwalia, Montek S., 1976. "Inequality, poverty and development," Journal of Development Economics, Elsevier, vol. 3(4), pages 307-342, December.
    9. O. Morrissey & I. Filatotchev, 2000. "Globalisation and Trade: The Implications for Exports from Marginalised Economies," Journal of Development Studies, Taylor & Francis Journals, vol. 37(2), pages 1-12.
    10. Margaret McMillan, 2001. "Why Kill The Golden Goose? A Political-Economy Model Of Export Taxation," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 170-184, February.
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