African Exports Research Articles

Corruption, product complexity and African exporters

ABSTRACTSeveral studies have shown that African manufacturers perform poorly, especially in comparison to their counterparts from other developing countries. We build on these studies by (a) examining the decision to stop exporting among African manufacturers and (b) investigating whether these decisions can be linked to institutional dimensions (such as corruption). Consistent with previous studies, we observe that a significant fraction of African firms stop exporting every year. Using product complexity as a measure of an industry’s ‘sensitivity’ to corruption, we find that firms in more ‘corruption-sensitive’ industries are more likely to stop exporting if there is an increase in overall corruption in the exporting country. Firm characteristics (such as size and productivity) also seem to influence the decision to stop exporting. Our finding about the relationship between corruption and the decision to stop exporting supports the conventional wisdom that corruption is detrimental to economic performance.

The topology of African exports: Emerging patterns on spanning trees

This paper is a contribution to interweaving two lines of research that have progressed in separate ways: network analyses of international trade and the literature on African trade and development. Gathering empirical data on African countries has important limitations and so does the space occupied by African countries in the analyses of trade networks. Here, these limitations are dealt with by the definition of two independent bipartite networks: a destination share network and\ a\ commodity share network. These networks - together with their corresponding minimal spanning trees - allow to uncover some ordering emerging from African exports in the broader context of international trade. The emerging patterns help to understand important characteristics of African exports and its binding relations to other economic, geographic and organizational concerns as the recent literature on African trade, development and growth has shown.

FOCUS: Asia becomes battleground for African crude exports

FOCUS: Asia becomes battleground for African crude exports

South Africa's Exports Performance: Any Role for Structural Factors?

Despite a substantial and prolonged exchange rate depreciation, South Africa's export performance has disappointed since the global financial crisis. In this paper we focus on the role of structural factors in reducing the responsiveness of South African exports to the real exchange rate depreciation. To this end, we construct a unique database of export performance at the firm level. Our analysis suggests that electricity bottlenecks, limited product market competition, and labor market constraints have reduced the responsiveness of firms' exports to the rand depreciation. On the other hand, a firm's ability to diversify its exports has helped it benefit more from currency movements.

South Africa's Exports Performance: Any Role for Structural Factors?

Despite a substantial and prolonged exchange rate depreciation, South Africa’s export performance has disappointed since the global financial crisis. In this paper we focus on the role of structural factors in reducing the responsiveness of South African exports to the real exchange rate depreciation. To this end, we construct a unique database of export performance at the firm level. Our analysis suggests that electricity bottlenecks, limited product market competition, and labor market constraints have reduced the responsiveness of firms’ exports to the rand depreciation. On the other hand, a firm’s ability to diversify its exports has helped it benefit more from currency movements.

Role of participative communication on lake management in the Sahel: Case of Lake Bam in Burkina Faso

In Burkina Faso, natural resources are often considered by people as a gift of God that has no limit. This is the case of Lake Bam, the largest lake in Burkina Faso, located in the Bam province. The lake plays an important role in the socio-economic activities the people who get the most for their existence. Indeed, green beans were produced there, making Burkina Faso the second African exporter of this product after Kenya. Fishing was also well developed there. However, we observe the shrinking of this natural water source because of siltation which is caused by agricultural activities and the adverse effects of climate change. The lake plays an important role in the socio-economic activities of the people who get the most for their existence. Therefore, to address this problem, measures to rehabilitate the lake have been taken, which will include the enhancement of the Lake spillway, the management of 500 ha for agriculture, the rehabilitation of 400 ha of existing cultivated areas. To support the implementation of the project it was agreed to involve communication processes, because communication is also a key challenge that helps address issues in social support for risk processes. The methodology used was based on semi-structured, individual and often focus groups discussion. The study concerned populations around Lake Bam, users of this lake, taking into account the diversity of activities that are undertaken there. It appears from this survey that people are aware of the problem but the way the project was introduced to them does not induce membership. Also, it emerges that another form of communication that integrates the participatory approach must be used to ensure better water resources management of Lake Bam. Keywords : Lake Bam, siltation, participatory communication, rehabilitation, Territory, Burkina Faso

INTRA-REGIONAL TRADE IN AFRICA AND THE IMPACT OF CHINESE INTERVENTION: A GRAVITY MODEL APPROACH

1. INTRODUCTIONChina has grown at phenomenal rates in the last few decades. However, in order to sustain these high growth rates, China needs to ensure a steady supply of natural resources like oils, minerals etc. The country's energy demands have more than doubled in the past few decades, leading to increasing pressures for meeting demands for natural resources (Vines et al., 2009; Taylor, 2009). These factors led China to look overseas for sources of mineral resources and could explain the increasing involvement of China in Africa since the late 1990s (Berthelemy, 2011; The Economist, 2008; Mohan, 2008; Marysse and Geenen, 2009; Kaplinsky, McCormick and Morris, 2006; Meier zu Selhausen, 2010). The NYU Wagner School Study concluded that 'China's foreign aid is driven primarily by the need for natural resources' (Lum et al., 2009, p. 5). Similarly, Foster et al. (2008) conclude that 'most Chinese government-funded projects in Sub-Saharan Africa are ultimately aimed at securing a flow of Sub-Saharan Africa's natural resources for export to China.'China-Africa trade has increased sharply since 2000. China's bilateral trade with Africa grew from USD 11 billion in 2000 to about USD 170 billion in 2011 (Direction of Trade Statistics, IMF, 2012). China has gradually progressed from one of the smallest among the top 10 trading partners of Africa to become its leading bilateral trade partner.1 To promote trade with the continent, China removed tariffs on 196 types of imports from 28 least developed Africa countries in 2005. By 2007, this had expanded to 454 items (Besada, Wang, and Whalley, 2008). Most African exports now receive duty-free access to China's market. These preferential tariff treatments have helped expand African exports to China.But most of the products for which China grants tariff exemption are principally raw materials. Thus, most of the increased trade flows represent a rising export of natural resources to China. About two-thirds of all African exports to China are oil and oil-related products.2 Africa showed a USD 20 billion trade surplus with China in 2011. But more than three-quarters of the continent's exports were oil, gas, metals and minerals from only five countries - Sudan, Angola, Egypt, Nigeria and South Africa. Excluding oil exports, Africa had a trade deficit with China amounting to USD 28 billion in 2011.3 Thus, the growth of African exports to China is driven by a very few countries. Apart from these few very resource-rich countries, the majority of African countries have 'mounting trade deficits' with China (Corkin, and Burke, 2006). This highlights the asymmetry of the relationship between China and African countries.Chinese investment in Africa has also increased dramatically. From USD 20 million per year in the early 1990s, Chinese FDI in Africa jumped close to USD 100 million in 2000 and reached more than USD 1 billion in 2006 (Zafar, 2007). Most of these investments are focused on long-term access to raw materials. Five resource-rich African countries - South Africa, Nigeria, Zambia, Algeria, and Sudan accounted for 87 percent of Chinese FDI inflows on average during the four year period of 2005 to 2008 (Meier zu Selhausen, 2010). Eisenman (2012) argues that almost all of Chinese investment into rail projects in Africa is aimed at connecting African raw material suppliers with Chinese buyers and Chinese goods manufacturers with African customers.Since the late 1990s China's aid to Africa has also increased significantly. There's no consensus in the literature so far regarding the determinants of Chinese aid to Africa. While Naim (2007) argues that political and commercial interests are the principle determinants of Chinese aid to Africa, Dreher and Fuchs (2011) argue that China is no different from other donors and Chinese aid allocations are not dominated by natural resource considerations. However, a large number of studies do suggest that Chinese aid is increasingly directed towards resource-rich Sub-Saharan African economies (Kaplinsky, and Morris, 2009; Brookes, and Shin, 2006). …

The potential for internal trade and regional integration in Africa

This study examines the potential for intra-Africa trade and the prospects of advancing regional economic integration through such trade. A variety of empirical models are deployed for the purpose. The analysis and model simulation results reveal the existence of significant potential for intra-Africa trade. However, realizing this potential and hence the effort to advance regional integration through intra-Africa trade is challenged by lack of complementarities of exports and imports as well as the relative competitive position of African potential export suppliers. This is the result of weak infrastructure, productivity and trade facilitation — in short, acute export supply constraint that characterizes the African export trade. This calls for an innovative approach to enhance intra-Africa trade and furthering regional integration. Addressing the challenge of export supply constraint, export competitiveness and diversification is found to be crucial. This in turn calls for policies that need to go beyond liberalization to actual realization of the potential for trade through provision of regional (multi-country) and domestic infrastructures, harmonizing macroeconomic policies, enhancing trade enabling institutions, developing trade facilitation as well as regionally focused diversification plan using the existing regional economic communities (RECs) as vehicles.

INVOLUCRAL BRACT BROWNING IN PROTEAS - THE WHAT, HOW AND WHAT NOW?

Involucral bract browning in Protea is characterised by brown blemishes that develop pre-harvest on the tips and/or margins of the involucral bracts, resembling a nail, hence the common term of dirty nail syndrome. These blemishes can occur on all sides of the inflorescence, or can be concentrated on the most sun-exposed side. Bract browning can seriously reduce the market value and export potential of this niche cut flower product, as it has a strong impact on the inflorescence appearance. Despite the visual and financial impact these blemishes can have on pack out rates at the producer level, bract browning in Protea has not been characterised yet, with no classification system for bract browning within South African export regulations, which currently only account for general blemishes. The aim of the study was to characterize bract browning in Protea 'Pink Ice' by using the South African export blemish quality standards as well as an adaptation of the classification system developed for Telopea species using three zones, on a 0-6 illustrative rating scale. Acceptability was determined for local market standards by benchmarking with a packing facility. Characterization of bract browning is required to assist the industry to assess the severity of involucral bract browning and to develop new strategies to prevent and/or ameliorate the development of bract browning in order to deliver premium quality products to a highly competitive international market.

Determining South Africa’s export potential to Australia: A panel data approach

This study explores South Africa’s exports to Australia from 2000 to 2012, using both a static and a dynamic augmented gravity model. Sectors with export potential are identified, whether these are reliable and stable is considered. The largest export potential includes the apparel sectors as well as the basic metals, communication, furniture, glass, iron, leather, motor, paper and printing sectors. The most stable and reliable export sectors are the motor, machinery, iron, basic chemicals and food sectors. Although these sectors could target the promotion of South African exports, South Africa could also serve as an important source country for Australia in strengthening ties with the African continent.

South African Exporters and the Global Crisis: Intensive Margin Shock, Extensive Margin Hangover

AbstractThis paper examines how changes at the intensive (established exporters exporting existing products to established markets) and the extensive (new exporters, products or markets) margins contribute to South African export growth and how this was affected by the global financial crisis. We find that the intensive margin is the more important contributor to export growth, contributing more than three quarters of observed growth. The intensive margin contracted significantly during the global financial crisis of 2009 but bounced back to pre‐crisis levels quickly. However, the impacts on the extensive margin persisted after the crisis with lower levels of entry of firms, new products and new destinations. The short‐term impact of the crisis was mitigated by the concentration of South African exports among larger, more productive super‐exporters. However, the fall in entry of new firms, products and destinations as a result of the crisis may mean that this concentration persists, and, at least over the next few years, South Africa does not diversify and broaden its exports.

Channel Member Satisfaction and Performance in African Export Marketing Channels: Some Insights From Ghana

This article investigates the impact of channel member satisfaction on channel performance in Ghanaian cocoa marketing channels. Channel member satisfaction is treated as a multidimensional construct consisting of both economic and social satisfaction. Channel performance is defined in terms of farmers’ acceptance of a large-scale marketing channel improvement. The results of the study indicate that initial acceptance of the channel improvement was based on economic satisfaction and continued use was based primarily on trust. Implications for theory and managerial practice are discussed.

Is China ‘Crowding Out’ South African Exports of Manufactures?

This article analyses the impact of Chinese competition on South African manufacturing exports to its major markets in Europe, the United States and Sub-Saharan Africa. The article considers five related research questions. First, are China and South Africa competing with each other in export markets, how extensive is such competition and how is this changing over time? Second, to what extent has Chinese competition led to the displacement of South African exports? Third, in which countries have South African exports been most affected? Fourth, which South African export sectors face the greatest threat from Chinese competition? Finally, how does South Africa's experience compare to that of Brazil, another middle-income country and regional power. We find that competition between South Africa and China increased significantly over the past decade, particularly in African markets. All types of manufactured exports lost ground to China, but the impact is strongest in low-technology products. South African exports have nevertheless increased from 2001 so that ‘crowding out’ should be interpreted in relative terms.

Determining South Africa's export potential to Australia: A panel data approach

This study explores South Africa’s exports to Australia from 2000 to 2012, using both a static and a dynamic augmented gravity model. Sectors with export potential are identified, whether these are reliable and stable is considered. The largest export potential includes the apparel sectors as well as the basic metals, communication, furniture, glass, iron, leather, motor, paper and printing sectors. The most stable and reliable export sectors are the motor, machinery, iron, basic chemicals and food sectors. Although these sectors could target the promotion of South African exports, South Africa could also serve as an important source country for Australia in strengthening ties with the African continent.

Exchange Rate Volatility and Export Performance in South Africa: (2000-2014)

This study sought to investigate the relationship between exchange rate volatility and export performance in South Africa. The main objective of the study was to examine the impact of exchange rate volatility on export performance in South Africa. This relationship was examined using GARCH methods. Exports were regressed against real effective exchange rate, trade openness, and capacity utilisation. The research aimed to establish weather exchange rate volatility impacts negatively on export performance in the manner suggested by econometric model. The result obtained showed that exchange rate volatility had a significantly negative effect of South African exports in the period 2000-2011.

The Gravity of China's African Export Promise

AbstractAfrica's largest trade partner, China, criticised for exchanging resources for manufactures, has promised to increase imports and optimise the structure of trade with Africa. Using a gravity model of China's imports for the years 1995–2009, we explore potential dynamics for this promise, uniquely accounting for market economy recognition and Taiwan recognition. The former is associated with increased imports, while the latter effect is ambiguous and statistically insignificant. Comparison of projected against actual imports across three growth‐path‐aligned economic geography typologies – resource‐rich; landlocked and resource‐poor; coastal and resource‐poor – sets out China's imports trends in an abstract framework of African export potential. We find not only ‘under’ importing across a majority of resource‐poor countries. We also find that current trade policy is the least applicable to these comparatively poor exporters’ trade with China. If the latter are to serve a broader catalytic role in Africa's regional industrial transformation as compared to the role of coastal and resource‐poor countries in regional economic transformation in Asia and Latin America, China–Africa trade and investment policies may need additional thinking.

Impact of South–South FDI and Trade on the Export Upgrading of African Economies

Summary We explore the impact of FDI and imports on the upgrading of African exports. We find that South–South flows impact differently from North–South ones on the ability of recipients to absorb the positive spillovers. Results support the view that South–South integration has a strong potential for accelerating structural transformation in the continent. South–South FDI foster diversification in key low-tech industries such as agro-industry and textiles, and raise the average quality of manufacturing exports, while importing from the South increases the ability to expand the variety of manufactured exports and to introduce more advanced goods in less-diversified economies.

The impact of trade facilitation factors on South Africa's exports to a selection of African countries

Economic growth can be enhanced through increased trade among countries, provided the correct institutional structures are in place. A country's trade is dependent not only on its own trade facilitation reforms but also on those of the trading partners. This paper, using an augmented gravity model, examines trade facilitation factors that impact on South Africa's exports to other selected African countries. The results of the estimation reveal the following. An improvement in the customs environment within the importing country provides the largest gain in terms of increasing trade flows, followed by the regulatory environment and domestic infrastructure. Furthermore, adjacency and common language impact positively on South African exports, while distance between countries impacts negatively on it. Being part of the Southern African Development Community is also enhancing exports from South Africa, compared with being part of the East African Community.

Corporate human rights social responsibility and employee job outcomes in Kenya

Purpose– The purpose of this paper is to identify dimensionality and evaluate effect of corporate human rights social responsibility (CHRSR) on employee job outcomes among three leading Kenya's horticultural exporters based in Naivasha, Kenya.Design/methodology/approach– Exploratory and explanatory survey was utilized on a sample of 450 employees selected using a multistage sampling technique. Structured questionnaire was used to extract both nominal and ordinal data, the latter's items were anchored on a five-point Likert scale. Descriptive, principal component analysis (PCA) and multiple regression was used to analyze the data.Findings– PCA of 32 items representing CHRSR yielded ten components while that of employee job outcomes yielded seven components reflecting the multidimensional nature of the constructs. Results showed that the selected firms have largely satisfied both HR and moral expectations. Regression results showed generally significant effect of CHRSR on employee job outcomes such as employee retention, satisfaction, commitment and pride.Research limitations/implications– A business case for CHRSR exists. This implies that compliance with the law, adoption of HR-related corporate social responsibility (CSR) is critical in enhancing employee job outcomes and overall organization performance.Originality/value– The study integrates CSR and HR into CHRSR. It demonstrates its multidimensional nature and utilizes statistical analysis to explore its relationship with employee job outcomes in an African export sector context and argues that CSRHR is more critical in Africa than more regulated contexts.

Introducing carbon taxes in South Africa

South Africa is considering introducing a carbon tax to reduce greenhouse gas emissions. Following a discussion of the motivations for considering a carbon tax, we evaluate potential impacts using a dynamic economywide model linked to an energy sector model including a detailed evaluation of border carbon adjustments. Results indicate that a phased-in carbon tax of US$30 per ton of CO2 can achieve national emissions reductions targets set for 2025. Relative to a baseline with free disposal of CO2, constant world prices and no change in trading partner behavior, the preferred tax scenario reduces national welfare and employment by about 1.2 and 0.6 percent, respectively. However, if trading partners unilaterally impose a carbon consumption tax on South African exports, then welfare/employment losses exceed those from a domestic carbon tax. South Africa can lessen welfare/employment losses by introducing its own border carbon adjustments. The mode for recycling carbon tax revenues strongly influences distributional outcomes, with tradeoffs between growth and equity.