IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v11y2023i10p259-d1263492.html
   My bibliography  Save this article

Why Has Trade Barely Moved Sub-Saharan Africa to Its Economic Potential?

Author

Listed:
  • Brian Tavonga Mazorodze

    (School of Economic and Management Sciences, Sol Plaatje University, Kimberley 8301, South Africa)

Abstract

The rise in global trade volumes since the early 90s has been welcomed by many under the notion that trade helps countries edge closer to their economic potential. A concerning observation, however, is that while Asia, Latin America, and Europe seem to have witnessed a discernible rise in per capita income during this period and moved closer to their economic potential, sub-Saharan Africa (SSA) does not seem to have recorded as much success. Defining economic potential as maximum possible income from given resources and existing technology, the results presented here for a panel of 22 sub-Saharan countries observed between 1995 and 2021 confirm that the region’s ability to edge closer to its full potential was heavily undermined by its small and shrinking manufacturing sector, a result that is replicated by counterfactual methods. In policy senses against this background, SSA may need to reconsider its widespread deindustrialization model and rejuvenate manufacturing. This policy implication feeds into the broader discussion of premature deindustrialization in SSA and its economic consequences. Evidence suggests that reversing this trend through expanding manufacturing potentially lifts about 50% of the sampled countries (including Rwanda, Togo, Guinea, Niger, Sierra-Leone, Gambia, Benin, Uganda, and Mozambique) from low-income status to middle-income status.

Suggested Citation

  • Brian Tavonga Mazorodze, 2023. "Why Has Trade Barely Moved Sub-Saharan Africa to Its Economic Potential?," Economies, MDPI, vol. 11(10), pages 1-27, October.
    • Handle: RePEc:gam:jecomi:v:11:y:2023:i:10:p:259-:d:1263492
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/11/10/259/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/11/10/259/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. George Battese & Sumiter Broca, 1997. "Functional Forms of Stochastic Frontier Production Functions and Models for Technical Inefficiency Effects: A Comparative Study for Wheat Farmers in Pakistan," Journal of Productivity Analysis, Springer, vol. 8(4), pages 395-414, November.
    2. Brian Mazorodze & Irrshad Kaseeram & Lorraine Greyling, 2021. "Trade and profit efficiency of manufacturing industries in South Africa," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 30(5), pages 707-724, July.
    3. Eric Evans Osei Opoku & Isabel Kit-Ming Yan, 2019. "Industrialization as driver of sustainable economic growth in Africa," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 28(1), pages 30-56, January.
    4. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Goyal, S.K. & Suhag, K.S. & Pandey, U.K., 2006. "An Estimation of Technical Efficiency of Paddy Farmers in Haryana State of India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 61(1), pages 1-15.
    2. Masood, Tariq & Ahmad, Mohd. Izhar, 2010. "Technical Efficiency of Microfinance Institutions in India- A Stochastic Frontier Approach," MPRA Paper 25454, University Library of Munich, Germany.
    3. Rodrigo Pereira de Oliveira & Bruno Ferreira Frascaroli, 2019. "Measuring the Efficiency of Tax Collection among Economic Sectors in Paraíba State Northeastern Brazil (2013-2015)," International Business Research, Canadian Center of Science and Education, vol. 12(7), pages 24-33, July.
    4. Chapple, Wendy & Lockett, Andy & Siegel, Donald & Wright, Mike, 2005. "Assessing the relative performance of U.K. university technology transfer offices: parametric and non-parametric evidence," Research Policy, Elsevier, vol. 34(3), pages 369-384, April.
    5. Ripoll-Zarraga, Ane Elixabete & Huderek-Glapska, Sonia, 2021. "Airports’ managerial human capital, ownership, and efficiency," Journal of Air Transport Management, Elsevier, vol. 92(C).
    6. Meili Huan & Fengxia Dong & Liang Chi, 2022. "Mechanization services, factor allocation, and farm efficiency: Evidence from China," Review of Development Economics, Wiley Blackwell, vol. 26(3), pages 1618-1639, August.
    7. Robert Lensink & Aljar Meesters, 2014. "Institutions and Bank Performance: A Stochastic Frontier Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(1), pages 67-92, February.
    8. Gavilan, Jose M. & Ortega Irizo, Fco. Javier, 2015. "On the Ability to Disentangle the Two Errors in the Normal/Half-Normal Stochastic Frontier Model /Sobre la capacidad de separar los dos errores en el modelo de frontera estocástica normal/half-normal," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 33, pages 619-632, Mayo.
    9. Sankranti, Sridhar & Langemeier, Michael R., 2004. "Tillage Systems, Cropping Practices, Farm Characteristics And Efficiency," 2004 Annual Meeting, February 14-18, 2004, Tulsa, Oklahoma 34632, Southern Agricultural Economics Association.
    10. Hadley, David & Shankar, Bhavani & Thirtle, Colin G. & Coelli, Tim J., 2001. "Financial Exposure, Technical Change And Farm Efficiency: Evidence From The England And Wales Dairy Sector," 2001 Annual meeting, August 5-8, Chicago, IL 20656, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Marzec, Jerzy & Pisulewski, Andrzej, 2019. "The Measurement of Time Varying Technical Efficiency and Productivity Change in Polish Crop Farms," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 68(1), March.
    12. Giannis Karagiannis & Vangelis Tzouvelekas, 1999. "Measuring Technical Efficiency with Panel Data: Results from Competing Models," Working Papers 9914, University of Crete, Department of Economics.
    13. Giannis Karagiannis, 2005. "Explaining output growth with a heteroscedastic non-neutral production frontier: the case of sheep farms in Greece," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 32(1), pages 51-74, March.
    14. Huang, Wei & Bruemmer, Bernhard & Huntsinger, Lynn, 2016. "Incorporating measures of grassland productivity into efficiency estimates for livestock grazing on the Qinghai-Tibetan Plateau in China," Ecological Economics, Elsevier, vol. 122(C), pages 1-11.
    15. Amy Ickowitz, 2011. "Shifting cultivation and forest pressure in Cameroon," Agricultural Economics, International Association of Agricultural Economists, vol. 42(2), pages 207-220, March.
    16. Richard T. Yao & Gerald E. Shively, 2007. "Technical Change and Productive Efficiency: Irrigated Rice in the Philippines," Asian Economic Journal, East Asian Economic Association, vol. 21(2), pages 155-168, June.
    17. Wilson, Paul & Hadley, David & Asby, Carol, 2001. "The influence of management characteristics on the technical efficiency of wheat farmers in eastern England," Agricultural Economics, Blackwell, vol. 24(3), pages 329-338, March.
    18. Orosco Gavilán, Juan Carlos & Lopes Moreira Da Veiga, María Helena & Wiper, Michael Peter, 2023. "Measuring efficiency of Peruvian universities: a stochastic frontier analysis," DES - Working Papers. Statistics and Econometrics. WS 36250, Universidad Carlos III de Madrid. Departamento de Estadística.
    19. Philip M. Bodman, 1999. "Labour Market Inefficiency and Frictional Unemployment in Australia and its States: A Stochastic Frontier Approach," The Economic Record, The Economic Society of Australia, vol. 75(2), pages 138-148, June.
    20. Gauri Khanna, 2006. "Technical Efficiency in Production and Resource Use in Sugar Cane: A Stochastic Frontier Production Function Analysis," IHEID Working Papers 15-2006, Economics Section, The Graduate Institute of International Studies.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:11:y:2023:i:10:p:259-:d:1263492. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.