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3.1 Developments in trade negotiations: Economic Report on Africa 2007

Written by: United Nations Economic Commission for Africa

Article Overview: World trade expanded significantly between 2000 and 2005. Total world exports increased from $US6,451 billion in 2000 to $10,393 billion in 2005, an increase of 61 per cent.

3.1 Developments in trade negotiations: Economic Report on Africa 2007

World trade expanded significantly between 2000 and 2005. Total world exports
increased from $US6,451 billion in 2000 to $10,393 billion in 2005, an increase of
61 per cent. Table 3.1 allows for a comparison of this evolution with African exports
over the same period.

Table 3.1 shows that over the past 6 years, world merchandise exports experienced
an average growth rate of 10.4 per cent. Over the same period, Africa performed
better, increasing its exports by 16 per cent on average annually. However, breaking
down the export performance by subregion reveals that the rapid increase in
exports is particularly concentrated in oil-exporting SSA countries. These countries
achieved an average export growth of 22.4 per cent over the period. On the other
hand, the average export performance of non-oil exporting SSA countries is very
much in line with the world average (11.2 per cent).

This seems to be further proof that the recent gains in Africa’s exports is not based
on diversification of the export base but is based rather on increased oil exports.
Moreover, table 3.1 shows that the variability of exports by oil producers is higher
than for other countries, probably owing to the volatility of oil prices. The recent
improvement in Africa’s export performance therefore appears to be vulnerable to
shifts in international commodity prices, particularly in changes in oil prices.


What is more, despite a recent slight recovery, Africa’s share of global exports of merchandise
remains low. Figure 3.1 shows the evolution of its share in global exports
from 1965 to 2005. Its share in 2005 was 2.85 per cent only, roughly the equivalent
of its 1991 value and less than half its peak value in 1980 (5.97 per cent). For comparative
purposes, Africa accounted for 14 per cent of world population in 2005. At
the current rate of growth of African exports and according to the United Nations
population growth estimates, the continent would have to wait until 2045 for its
share in world exports to match its share of world population. Non-oil-exporting
SSA countries currently account for 8.5 per cent of world population. At the current
rate of growth of their exports and even without taking account of their increasing
weight in total world population, these countries would have to wait until 2387
(382 years!) to see their export share match their share of world population.

In light of the situation of low export performance and dependency on the prices
of just a few commodities, diversification should remain a priority objective for all
African countries, particularly but not only for SSA countries.

Investment and diversification depend on a number of internal factors such as governance,
regulatory environment, productivity and comparative advantages, etc.
However, external factors also help to set the conditions for diversification. These
include effective market access, regional integration and the multilateral and other
international trade agreements that are currently being negotiated.

Much was expected of a successful Doha Development Round of WTO negotiations
launched in 2001 at the Fourth WTO Ministerial Conference from 9 to 14
November 2001, in Qatar. Numerous studies suggested that there would be significant
gains for developing countries. Likewise, it was often expected that Economic
Partnership Agreements (EPAs) with the EU would result in improved business
environments in African countries, allowing for more investments and enhancing
the prospects for economic diversification. This section takes stock of the developments
in the trade negotiations in which African countries are involved.

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Article Tags: Africa, African countries, African exports, African exports, export performance, global exports, oil exports, oil prices, SSA, SSA countries, world exports, world exports, world population



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