Can African manufacturing firms become successful exporters?

Low growth of manufacturing exports has been identified as a major factor for poor economic performance in many Sub-Saharan African economies. Exports improvement in the manufacturing sector especially through the learning process is a necessary condition for growth and real development of less developed and developing economies in Sub-Saharan Africa (SSA). The study sought to establish empirical support in the SSA context for the "learning by exporting hypothesis" by employing Cobb-Douglas type of production functions and firm-level survey data from a sample of ten African countries (Nigeria, Ghana, Kenya, Tanzania, Ethiopia, South Africa, Cameroon, Botswana, Mauritius, and Zimbabwe). Furthermore, employing Ordinary Least Squares (OLS), Clerides, Lach and Tybout (CLT) and Non-parametric Maximum Likelihood (NPML) estimation techniques, the study found support for the learning by exporting hypothesis in Sub-Saharan Africa. The study recommended further investment in human r...

Journal of Development Studies, 2004

In this paper, we use firm-level panel data for the manufacturing sector in four African countries to estimate the effect of exporting on efficiency. Estimating simultaneously a production function and an export regression that control for unobserved firm effects, we find both significant efficiency gains from exporting, supporting the learning-byexporting hypothesis, and evidence for self-selection of more efficient firms into exporting. The evidence of learning-by-exporting suggests that Africa has much to gain from orientating its manufacturing sector towards exporting.

Development Centre seminars, 2001

Can Africa ever hope to have comparative advantage in manufactured exports? This question, posed in the following chapter, becomes a theme that reverberates throughout this volume. The ongoing debate among economists about how to answer it and thus give guidance to policymakers pits two fundamental and opposing theoretical views against one another. This book not only discusses the debate, in which the authors duly take their positions, but also tries to break new ground in empirical tests that would support an answer of "Yes!" to the question. As will become evident, however, such an answer depends heavily on supportive policies, resolutely pursued. The final chapter, one of the two that pull together the various contributions in the book, reminds us that ".. . there is no free lunch". This conference volume on policies to promote manufacturing competitiveness in sub-Saharan Africa stems from a meeting held in Johannesburg on 6-7 November 1998, jointly organised by the African Economic Research Consortium, the International Monetary Fund and the OECD Development Centre. Participants included policymakers from African countries, academics and experts from international and regional institutions. The papers presented at the conference, of which this book includes a selection, ranged from crosscountry comparisons to country case studies.

Policy Research Working Papers, 1999

Elbadawi analyzes the determinants of manufactured Elbadawi tests the implications of these three views exports in Africa and other developing countries, guided with an empirical model of manufactured export by three pivotal views on Sub-Saharan Africa's (Africa's) performance (manufactured exports' share of GDP), prospects in manufactured exports: using a panel of 41 countries for 1980-95. His findings: Adrian Woods holds that Africa cannot have * Corroborate the predictions of the transaction comparative advantage in exports of labor-intensive thesis, in that transaction costs are major determinants of manufactures (even if broadlv defined to include raw manufactures exports. Investing in reducing these costs material processing) because its natural resources generates the highest payoff for export capacity. endowment is greater than its human resources * Lend support for the exchange rate-led strategy. endowment (endowment thesis). After controlling for other factors, ratios of natural * Paul Collier argues that, for most of Africa, resources per worker were not robustly associated with unusually high (policy-induced) transaction costs are the export performance across countries, but this cannot be main source of Africa's comparative disadvantage in taken as formal rejection of the endowment thesismanufactured exports (transaction thesis). unless one is prepared to assume that manufactured * A third approach (Elbadawi and Helleiner) exports' share of GDP was highly correlated with ratios emphasizes the importance of stable, competitive real of manufactured to aggregate (or primary) exports. But exchange rates for profitability of exports in low-income this is not unlikely. countries (exchange rate-led strategy). This papera product of Public Economics, Development Research Group-is part of a larger effort in the group to research manufactures exports' competitiveness. Copies of the paper are available free from the World Bank,

This paper examines the status of industrial development in Africa with a focus on the identification of stylized facts associated with African manufacturing. It also provides an analysis of past attempts at promoting industrial development in the region and the lessons learned from these experiences. Panel data (combination of Cross sectional and Time series analysis) is applied on the data obtained by UNIDO from developing countries spanning from 1980-2010. After gaining political independence, which occurred mainly in the 1960s, most African countries started to promote industrialization. The emphasis on industrialization was based on the political conviction by African leaders that it was necessary to ensure self-reliance and reduce dependence on advanced countries. Furthermore, there was the expectation that industrialization would hasten the transformation of African countries from agricultural to modern economies, create employment opportunities, raise incomes as well as living standards, and reduce vulnerability to terms of trade shocks resulting from dependence on primary commodity exports. But during the 1970s, with successive oil shocks and an emerging debt problem, it started to become clear that import substitution industrialization was not sustainable. With the introduction of structural adjustment programmes in the 1980s, African countries curtailed specific policy efforts to promote industrialization and focused on removing anti-export biases and furthering specialization according to comparative advantage. It was expected that competitive pressures would revitalize economic activity by leading to the survival of the fittest. But whilst these policies were certainly intended to have structural effects, the conventional view is that they did not boost industrialization in the region. Efforts to promote industrial development in Africa should be centered on (a) promoting scientific and technological innovation, (b) creating linkages in the domestic economy, (c) fostering entrepreneurship, (d) improving government capabilities, (e)adopting appropriate monetary and fiscal policies.

Economic Insights – Trends and Challenges, 2021

Developing countries in the factor-driven stage of development are usually bedevilled by domestic supply-side constraints which hinder translation of their comparative advantages to development. This study examines the domestic supply-side determinants to intra-Africa export performance in selected African countries. The study analysed 1994 to 2019 panel data of the biggest economies in each of the five African sub-regions, using pooled mean group (PMG) technique. The result from the study revealed capital formation, institutional quality, macroeconomic stability, technology adoption and infrastructure as significant long-run determinants of intra-Africa export performance while size of labour force was found to be insignificant long-run determinant of intra-Africa export share. All short-run coefficients of explanatory variables except one period lag of infrastructure and capital formation were insignificant. The coefficient of error correction term was negative and statistically s...

2020

Abstract: The main objective of this study was to analyze the determinants of export participation of agricultural manufacturing firms in East Africa. In order for East African agricultural manufacturing firms to achieve global competitiveness, they need to have an indication of the factors that influence their export participation. Regression results using probit estimation procedure indicate that capital, foreign ownership and training in Uganda, average education, location in Nakuru and proportion of unskilled workers in Kenya, and firm size and location in Arusha and Mwanza in Tanzania, positively influences export participation of agricultural manufacturing firms. To promote exports, Tanzania should design strategies to grow small firms into large ones using measures such as loan guarantee schemes for small and medium firms, tax holidays for joint ventures and mergers, etc. The Ugandan government should also provide incentives for capital imports such as maintaining the current...

Center for Global Trade Analysis, …, 2006

Africa's export performance over recent decades is typically portrayed as being poor. This paper takes a new look at the record, using data on the volume rather than the value of African exports. When analysed in volume terms a quite different picture of African export performance emerges. According to UNCTAD data, between 1990-2002 the export volumes for non-oil exporters actually increased by over 130%. This impressive supply-side performance has not been properly documented. Previous studies have fixed too much attention to the value of African exports, something which, as primary commodity exporters, is largely beyond their control. The study uses estimates of volume of exports, available from UNCTAD, to explain African trade performance. Using a dynamic panel data analysis for 48 African countries over the period 1987-2002, the key determinants of export performance are ascertained. The implications of the findings for policy makers are subsequently discussed.

2017

and Zambia was around 4 to 7%. The amount of exports of goods and services in the SADC region has also shown some promising signs, implying that SADC economies are increasing the exports in either goods form or services. Exports of goods and services are an important source of foreign exchange reserves and can improve balance of payments problems, and reduce unemployment by creating opportunities. Seetanah (n.d 3) indicates that the average exports share of SADC was US$17.5 million during 2000 to 2008. In the period 1980-1991 on average, exports of goods and service for Angola,

The main objective of this study was to analyze the determinants of export participation of manufacturing firms in East Africa. In order for East African manufacturing firms to achieve global competitiveness, they need to have an indication of the factors that influence their export participation. Regression results using probit estimation procedure indicate that capital, foreign ownership, education level of the manager and training in Uganda, capital, training of workers and proportion of unskilled workers in Kenya, and firm size and foreign ownership in Tanzania, positively influences export participation of manufacturing firms. To promote exports, Tanzania should design strategies to grow small firms into large ones using measures such as loan guarantee schemes for small and medium firms, tax holidays for joint ventures and mergers, etc. The Ugandan and Kenyan government should also provide incentives for capital imports such as maintaining the current zero rating of capital imp...

Chinese Business Review, 2018

The main objectives of this study are to identify and analyze variables that have an impact on the export performances of seven East African countries and suggest practical solutions to improve export performance in East Africa. Using data from the World Development Indicators database we conducted panel data analysis for the period of 1990-2014. Empirical results show that labor force, industrialization, foreign direct investment, and exchange rate have a positive impact on export value. On the other hand, inflation has a negative impact on export performance while GDP growth is the only variable that does not affect the export value of East African countries. Finally, we suggest some recommendations, including the need of replacing agricultural exports with industrial export, improving infrastructural facilities as well as the quality of human capital, and the need for policies for attracting international investors.

This paper used quantitative analysis with the help of pure descriptive statistics to examine the export performance of Newly Industrialized Countries; the lesson for African countries. The researcher selected Four NICs and Four African countries based on the data availability from the World Bank Development Index (2012). The NICs considered for the study are; China, India, Brazil and South Africa. While Ivory Coast, Gabon, Egypt and Kenya were selected in Africa based on data availability and geographical representation. The study reveals that the same peculiar hindrances factors that are obstacles to African countries' export performance and economic success in the long run also applies to NICs but they were able to overcome it and drag themselves out of the poverty net. The necessary policy prescriptions were recommended by the researcher to the African countries to move near the end of "catch up " phase in order to achieve the impressive export performance that will lead to sustainable growth and development.

This paper used quantitative analysis with the help of pure descriptive statistics to examine the export performance of Newly Industrialized Countries; the lesson for African countries. The researcher selected Four NICs and Four African countries based on the data availability from the World Bank Development Index (2012). The NICs considered for the study are; China, India, Brazil and South Africa. While Ivory Coast, Gabon, Egypt and Kenya were selected in Africa based on data availability and geographical representation. The study reveals that the same peculiar hindrances factors that are obstacles to African countries’ export performance and economic success in the long run also applies to NICs but they were able to overcome it and drag themselves out of the poverty net. The necessary policy prescriptions were recommended by the researcher to the African countries to move near the end of “catch up " phase in order to achieve the impressive export performance that will lead to sustainable growth and development.

2000

It has been argued that Africa will not be able to export manufactures as it lacks the necessary skills. Without an ability to export there will only be an incentive to invest in the sector if domestic demand grows rapidly. Comparative data for four African countries - the Cameroon, Ghana, Kenya and Zimbabwe - shows that in the early 1990s

In this paper it is argued that policy towards manufacturing in Africa can reduce poverty if such policy focuses on the creation of high paying jobs. The paper draws on a range of cross- country firm-level evidence to show how policy can promote jobs and higher real wages. It is shown that Mauritius is a country which has achieved both these objectives. The paper places Mauritius in the context of other African countries and then asks why these countries have lagged so far behind. The paper examines the policies needed to build a linkage from manufacturing to overall economic growth with a substantial impact on poverty drawing on firm-level evidence from Nigeria, Kenya, Tanzania, Ghana and South Africa.