Africa’s Exports

Shanta Devarajan*World Bank

*with the assistance of Yutaka Yoshino

I. The Problem

Africa’s Share of World Trade is Falling

Exports and Incomes in Mauritius

500

1000

1500

2000

2500

Exports

4000

6000

8000

10000

12000

14000

Incomes

1970 1980 1990 2000Year

Income per Capita Exports per Capita

Incomes per capita are in 1996 PPP$ from PENN World Tables.Exports per capita are in 1995 US$ from World Bank Development Indicators

Mauritius Incomes and Exports

Figure Apparel exports to US from SSA, $Mn

0

250

500

750

1,000

1,250

1,500

1,750

2,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Rest of SSAMauritiusSACUMadagascarKenya

Source: UN Comtrade

Other African countries are following Mauritius

Exports are important …

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

E. Asiaand

Pacific

ECA LatinAmerica &Caribbean

MNA S. Asia SSA

Non-oil export share of GDP (%)

1983-19851993-19952003-2005

Source: IMF WEO database.Note: export shares are unweighted average.

…but are growing slowly…

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

1960's 1970's 1980's 1990's 2000~2005

Expo

rts

grow

th a

nnua

l %, s

impl

e av

erag

e

Africa Average Africa top performers Asia top performers China

Creating an export push

…and are declining in importance for Africa’s top performers

0%

10%

20%

30%

40%

50%

60%

70%

1960's 1970's 1980's 1990's 2000~2005

Expo

rt as

% o

f GD

P

Africa average Africa top performers Asia top performers China

Africa’s exports remain concentrated

Source: World Bank World Trade Indicators

Concentration and Diversification of Export: 2000-2004 Average

0

10

20

30

40

50

60

70

80

90

Europe and CentralAsia

East Asia- Pacific South Asia Latin America andCaribbean

Middle East andNorth Africa

Sub Saharian Africa0

20

40

60

80

100

120

140

160

180

Export Concentration Index (0-100)left axis

Share of Top 5 Products in Total Exports (%) left axis

No. of Exported Product Categoriesright axis

II. What do we know about solutions?

• Not much– Very little plant-level panel data (except for

RPED and repeated ICAs) • What we know about firms

– Large firms export more

Exporting and firm size

0 20 40 60 80

TANZANIA

SOUTH AFRICA

NIGERIA

KENYA

GHANA

SmallMedium

Large

MediumLarge

SmallMedium

Large

SmallMedium

Large

SmallMedium

Large

Percentage of Firms Exporting to Africa and Outside of Africa

To Africa To Outside of Africa

Changes in the Size Distribution of Manufacturing Firms in Ghana

II. What do we know about solutions?

• Not much– Very little plant-level panel data (except for RPED,

repeated ICAs) • What we know about firms

– Large firms export more– Foreign-owned firms export more (but very few of

them, compared to large number of domestic, informal firms)

– Positive correlation between export orientation and productivity (self-selection or learning?)

II. What do we know about solutions?

• Behind-the-border factors– Trade facilitation

Factory floor costs compare well with India & China

$0.16 $0.18 $0.12 $0.16 $0.19

$0.65

$0.17$0.29

$0.00

$0.20

$0.40

$0.60

$0.80

Madagasca

rKen

yaGhana

Mozambiq

ueLeso

thoSouth

Afric

aIndia

EPZ ChinaDirect cost per male shirt

The time to clear goods at port is several days in many countries in Africa

02468

101214161820

Eritrea

Ethiop

iaMoza

mbique

Nigeria

Uganda

Zambia

Kenya

Morocco

China

India

Days to clear imports, median Days to clear exports, median

II. What do we know about solutions?

• Behind-the-border factors– Trade facilitation– Domestic supply constraints

Access to electricity by region

24.7%

40.8%

86.6% 87.3%90.4%

0

10

20

30

40

50

60

70

80

90

100

Acce

ss to

ele

ctric

ity (%

of p

opul

atio

n)

Sub-Saharan Africa South Asia Latin America & CaribbeanEast Asia & Pacific Middle East & North Africa

Data sources: The World Bank WDI database, April 2006.

Africa lags in access to infrastructure

Building the private sector

Africa lags other regions in the cost of doing business …

Data sources: World Bank Doing Business Database as of November 2006..*Normalized ranking from Doing Business 2006.** Ranking from Doing Business 2007.

Ease of doing business rank, Simple average by region

132

7281

92 92102

131

74 7784

98105

0

20

40

60

80

100

120

140

Sub SaharanAfrica

East Asia &Pacific

East Europeand Central

Asia

Latin Americaand Caribbean

Middle Eastand North

Africa

South Asia

2005*

2006**

Average Ranking of Doing Business, the lower the better

Alleviating domestic constraints could increase exports in African, particularly

for manufactured products

15.8

1.9 2.3

17.1

2.2

15.3

02468

1012141618

Export CustomsProcedures

Internet Access PowerInfrastructure

All Mechandise ExportsManufactured Exports

Predicted Increase in Bilateral Exports (%) of

Africa

10% improvement in Exporter Country in Africa

Source: Africa’s Silk Road (2007)

II. What do we know about solutions?

• Behind-the-border factors– Trade facilitation– Domestic supply constraints

• Geography and institutions– Affect number of exporters rather than how

much each exporter sells in foreign markets (Elbadawi, Mengistae and Zeufack, 2006)