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.
To learn more about this author, visit United Nations Economic Commission for Africa's Website.
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Dianne Crampton
Dianne Crampton is an Executive Leadership Coach and Team Building Consultant and creator of the TIGERS team development model. For the past twenty years she has helped leaders and teams achieve goals with high levels of collaboration and teamwork.
Crampton is a published author. Her contribution to Working Together: Diversity As Opportunity was endorsed by Stephen Covey. She has written for trade magazines. Merrill Lynch nominated her business for Inc. Magazine’s regional small business and entrepreneurial awards. Her work with Native Americans was recognized at a United Nations sponsored conference in 1994.
The TIGERS model passed two rigorous validation studies in 1992 and 1994. The TIGERS Survey is able to measure and track team development over time.
Dianne is also the creator and distributor of the TIGERS Team Wheel game. This game helps groups identify behaviors that build collaborative groups and behaviors that cause conflict, morale problems, production failures, and misunderstandings.
For more information, or to subscribe to TigerTracks, a free monthly leadership and team newsletter go to http://www.corevalues.com - Visit Dianne Crampton's Website |
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