Front Matter

Front Matter

Author(s):
International Monetary Fund
Published Date:
August 2001
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    Development Centre Seminars with the IMF and the AERC

    Policies to Promote Competitiveness in Manufacturing in Sub-Saharan Africa

    Edited by

    Augustin Kwasi Fosu, Saleh M. Nsouli, Aristomène Varoudakis

    INTERNATIONAL MONETARY FUND (IMF)

    AFRICAN ECONOMIC RESEARCH CONSORTIUM (AERC)

    DEVELOPMENT CENTRE

    OF THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

    Organisation for Economic Co-operation and Development

    Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed:

    • - to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy;

    • - to contribute to sound economic expansion in Member as well as non-member countries in the process of economic development; and

    • - to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations.

    The original Member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became Members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22nd November 1996), Korea (12th December 1996) and the Slovak Republic (14th December 2000). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention).

    The Development Centre of the Organisation for Economic Co-operation and Development was established by decision of the OECD Council on 23rd October 1962 and comprises twenty-three Member countries of the OECD: Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Korea, Luxembourg, Mexico, the Netherlands, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, as well as Argentina and Brazil from March 1994, Chile since November 1998 and India since February 2001. The Commission of the European Communities also takes part in the Centre’s Advisory Board.

    The purpose of the Centre is to bring together the knowledge and experience available in Member countries of both economic development and the formulation and execution of general economic policies; to adapt such knowledge and experience to the actual needs of countries or regions in the process of development and to put the results at the disposal of the countries by appropriate means.

    The Centre has a special and autonomous position within the OECD which enables it to enjoy scientific independence in the execution of its task. Nevertheless, the Centre can draw upon the experience and knowledge available in the OECD in the development field.

    THE OPINIONS EXPRESSED AND ARGUMENTS EMPLOYED IN THIS PUBLICATION ARE THE SOLE RESPONSIBILITY OF THE AUTHORS AND DO NOT NECESSARILY REFLECT THOSE OF THE OECD OR OF THE GOVERNMENTS OF ITS MEMBER COUNTRIES.

    Publié en français sous le titre:

    PROMOUVOIR LA COMPÉTITIVITÉ MANUFACTURIÈRE EN AFRIQUE SUBSAHARIENNE

    © IMF/AERC/OECD 2001

    Permission to reproduce a portion of this work for non-commercial purposes or classroom use should be obtained through the Centre français d’exploitation du droit de copie (CFC), 20, rue des Grands-Augustins, 75006 Paris, France, tel. (33–1) 44 07 47 70, fax (33–1) 46 34 67 19, for every country except the United States. In the United States permission should be obtained through the Copyright Clearance Center, Customer Service, (508)750–8400, 222 Rosewood Drive, Danvers, MA 01923 USA, or CCC Online: www.copyright.com. All other applications for permission to reproduce or translate all or part of this book should be made to OECD Publications, 2, rue Andre-Pascal, 75775 Paris Cedex 16, France.

    Foreword

    This work was produced following an international conference jointly organised by the International Monetary Fund and the OECD Development Centre in Johannesburg in November 1998. It is published in the context of the Development Centre’s research on “Emerging Africa” and precedes a volume of that title, also published in 2001.

    Acknowledgements

    The Development Centre would like to express its gratitude to the Government of Switzerland for the financial support given to the project on “Emerging Africa” in the context of which this study was carried out.

    Sub-Saharan Africa

    The boundaries and names shown on this map do not imply official endorsement or acceptance by the OECD.

    Table of Contents

    Preface

    The papers in this volume were presented at a conference organised by the African Economic Research Consortium (AERC), the Development Centre of the Organisation for Economic Co-operation and Development (OECD), and the International Monetary Fund, held in Johannesburg, South Africa, on 6-7 November 1998.

    The conference focused on what is needed to ensure the sustainability of the recent economic recovery in the region and highlighted the importance of Africa’s rapid integration into the global economy. After years of stagnation, many African countries experienced renewed growth in the 1990s, the result, largely, of the broad economic and structural reforms implemented during those years. The region, however, is still heavily dependent on primary commodity exports at a time when such reliance makes these economies particularly vulnerable to swings in the terms of trade and fluctuations in weather conditions. An essential element for integrating the countries into the world economy and reducing their vulnerability to exogenous shocks is to shift away from dependency on primary commodity exports by promoting a more competitive manufacturing sector.

    The papers in this volume address three important issues: i) the role of exchange-rate policy in enhancing the competitiveness of African manufactured exports; ii) the steps that can be taken to improve production efficiency; and iii) the role of institutional and structural reforms in promoting competitiveness in manufacturing and in improving Africa’s attractiveness to foreign direct investment. An Epilogue, written by Aristomène Varoudakis, now of the World Bank, evaluates progress and developments since the conference which gave rise to this volume was held.

    It is our hope that the materials in this book will serve both the scholars and the policymakers interested in Africa’s continued economic growth and further integration into the global economy.

    Mohsin S. Khan
    Director
    IMF Institute
    Jorge Braga de Macedo
    President
    OECD Development Centre
    Delphin G. Rwegasira
    Executive Director
    AERC
    March 2001

    List of Abbreviations

    AERC

    African Economic Research Consortium

    CFA

    Communauté francophone d’Afrique

    CMA

    Capital Market Authority

    DTCA

    Dynamic theory of comparative advantage

    EGT

    Endogenous growth theory

    FDI

    Foreign direct investment

    EPZs

    Export-processing zones

    GDP

    Gross domestic product

    GLS

    Generalised least squares

    HIID

    Harvard Institute for International Development

    IIT

    Intra-industry trade index

    IMF

    International Monetary Fund

    LSDV

    Least squares dummy variable

    NSE

    Nairobi Stock Exchange

    OECD

    Organisation for Economic Co-operation and Development

    OLS

    Ordinary least squares

    REER

    Real effective exchange rate

    RER

    Real exchange rate

    SITC

    Standard International Trade Classification

    STCA

    Static theory of comparative advantage

    TFP

    Total factor productivity

    UNDP

    United Nations Development Programme

    VAT

    Value-added tax

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