Competitiveness of East African Exports: A Constant Market Share Analysis

Abstract

AbstractEast African Community (EAC) exports are steadily growing. This performance of exports could be attributed to improving competitiveness despite fluctuating world trade, but also to the market focus of exporters and/or the composition of the exported commodities. This chapter focuses on competitiveness of EAC's exports using Constant Market Share analysis (CMS) to decompose EAC export growth by product category (SITC single digit level). Data is from UN Comtrade database for two periods: Period I (2009–2013) and Period II (2014–2018). The analysis focuses on disentangling the world trade effect, the commodity composition effect and the competitiveness effect. The reference group for this analysis was the world market. Findings of the study are that the world trade, commodity composition and competitiveness effects were all positively associated with increased export growth in EAC from Period I to Period II. Export growth of Standard International Trade Classification single digit-level commodities in EAC was attributed to increased demand for such products in the world market, and the commodities exported had a faster growing demand. Furthermore, there was increased competitiveness for EAC's products directed towards the selected group of reference countries.