Chapter

Chapter 2: Evolution of Sub-Saharan African Trade Patterns through 2005

Author(s):
Sanjeev Gupta, Kevin Carey, and Ulrich Jacoby
Published Date:
October 2007
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Trade Patterns by Destination

The share of sub-Saharan Africa’s exports to developing countries has more than doubled since 1990. As Asia industrializes, its demand for natural resources increases. Sub-Saharan Africa has responded to this new export opportunity, and Asia now receives about 25 percent of sub-Saharan Africa’s exports. China and India together account for about 10 percent of both exports from and imports to sub-Saharan Africa—25 percent more than the share of these two countries in world trade (Broadman, 2007).

Economic relations between China and sub-Saharan Africa have expanded enormously in recent years (Box 1). In 2005, the most recent year for which data are available, sub-Saharan African exports to China amounted to $19.2 billion, compared with negligible levels in 1990 and some $5 billion in 2000. They have grown by 30 percent annually since 2000 and account for about 20 percent of sub-Saharan Africa’s total export growth during that period. Fuel accounted for about 70 percent of total sub-Saharan Africa exports to China in 2005. To put this in global perspective, China imported $64.4 billion worth of fuel from the world as a whole in 2005, of which $13.3 billion came from sub-Saharan Africa. Thus, sub-Saharan Africa accounted for 20.7 percent of all Chinese fuel imports. As a percentage of total Chinese imports, sub-Saharan Africa accounts for 2.9 percent. Sub-Saharan African imports from China have also surged, from $3.5 billion in 2000 to more than $13 billion in 2005.

Box 1.China’s Financial Relations with Sub-Saharan Africa

China’s financial assistance to sub-Saharan Africa is substantial. Loans and credit lines are estimated at about $19 billion, and in October 2006 at the Beijing Summit, China announced assistance of about $5 billion. The beneficiaries of the largest flows are Angola, Equatorial Guinea, Gabon, the Republic of Congo, and Nigeria; Angola and Equatorial Guinea alone have credit lines totaling about $14 billion. The share of grants is small, but China recently cancelled an estimated $260 million in debt for the Democratic Republic of the Congo, Ethiopia, Guinea, Mali, Rwanda, Senegal, Togo, and Uganda.

The concessionality of the loans varies widely.1 Some large loans and credit lines have not been fully concessional, although their terms are more favorable than those of the market. However, a recent $2 billion credit line to Equatorial Guinea and numerous smaller loans to sub-Saharan African countries are concessional. The degree of concessionality is also affected by the requirement that only Chinese companies using Chinese products bid on the projects (70 percent of Chinese credit lines in Angola have been used this way). In addition, repayment of loans has sometimes been tied (as in Angola) to the supply of oil.

China’s aid to sub-Saharan African countries is aimed largely at financing projects in energy, telecommunications, and transportation. It is often accompanied by deals to develop mining and energy resources. For example, in the Republic of Congo, in return for the right to explore and exploit natural resources, China is helping build transportation, energy, telecommunications, and water facilities and is providing support for social sectors. However, China’s activities in construction and infrastructure predate its interest in resource-linked investments; Chinese construction companies were the first to enter Africa. For example, China was involved with the Tanzania-Zambia railway when it was constructed in the 1970s.

Chinese state-owned companies often enter into joint ventures with sub-Saharan African state-owned companies in resource-based projects. The Chinese company SINOPEC has invested $3.5 billion in a partnership with the Angolan Sonangol to pump oil from recently auctioned offshore blocks. SINOPEC has also announced its intention to build a $3 billion refinery in Angola. In Gabon, the CMEC/Sinosteel consortium—financed by the Chinese Export-Import Bank—is investing about $3 billion in exploiting iron ore deposits; it is constructing a railway, a port, and a hydroelectric power station in return for exclusive rights to develop the mine. And a subsidiary of the China National Offshore Oil Corporation (CNOOC) recently signed a production-sharing contract with the National Oil Company of Equatorial Guinea (GEPetrol). However, joint ventures in construction are rare.

1 Loans are generally considered concessional if they have a minimum grant element of 35 percent, based on reference commercial interest rates published by the Organization for Economic Cooperation and Development.

This expansion in economic relations with China is not unique to sub-Saharan Africa. In fact, there has been rapid growth in China’s trade with many developing and developed countries. For example, India’s imports from China grew from extremely low levels in 1990 to nearly $11 billion in 2005–06; its exports to China were about $7 billion in 2005–06, again up from minuscule levels in 1990. Imports to the European Union from China doubled between 2000 and 2005, when, at about €160 billion, they were almost as high as EU imports from the United States.2 Sub-Saharan Africa is unusual in global terms in that it runs a trade surplus with China, because its resource abundance is a key driver of the trade relationship. In this regard sub-Saharan Africa most resembles Latin America, where exports to China are also concentrated in primary products, whereas imports are predominantly manufactured (Moreira, 2007).

Nevertheless, China has placed special emphasis on a multifaceted relationship with sub-Saharan Africa, encompassing trade, aid, and financial flows. At the Beijing Summit of the Forum on China-Africa Cooperation, President Hu Jintao announced that by 2009 China would double its 2006 assistance to Africa; provide $5 billion in preferential credits and the same amount in a China-Africa Development Fund to encourage and support investment by Chinese companies in Africa; cancel all interest-free government loans due at end-2005 owed by heavily indebted poor countries and least developed countries in Africa that have diplomatic relations with China; improve market access; and provide assistance in social sectors, for example, by training African professionals, building hospitals and schools, and funding malaria prevention and treatment. In addition, commercial contracts worth $1.9 billion were concluded in various sectors, and the intention to more than double bilateral trade to $100 billion by 2010 was announced. Though the attitude toward China’s active role is generally favorable in Africa, there have been points of controversy, such as textile imports and labor conditions (McLeary, 2007).

Even though Asia’s importance to sub-Saharan Africa has been increasing, the European Union and the United States are still its largest trading partners (Figure 2). Although sub-Saharan African exports to China have grown rapidly—by 260 percent cumulatively between 2000 and 2005—and China is now sub-Saharan Africa’s single largest trading partner in Asia, there has also been substantial growth in exports to traditional sub-Saharan African destinations.

Figure 2.Total Merchandise Exports by Destination, 1985 and 2005

(US$ Billions)

Source: UN Comtrade.

Exports to the EU-153 grew by 66 percent between 2000 and 2005, and those to the United States grew by 112 percent. Merchandise exports to China of about $19 billion in 2005 are dwarfed by exports to the EU-15 of $56 billion and to the United States of $52 billion.4 The share of the United States and the European Union is still two-and-a-half times that of Asia and almost six times that of China (Figure 3).

Figure 3.Destination Shares of Sub-Saharan African Exports, 1990 and 2005

(Percent)

Sources: UN Comtrade; and IMF staff calculations.

Trade Patterns by Product

Fuel explains much of sub-Saharan Africa’s export surge in value terms (Figure 4). Total sub-Saharan African exports rose by just over 75 percent between 1985 and 2000—an annual rate of about 5 percent. They have since grown by another 75 percent, tripling the annual growth rate for 2000–05 to nearly 15 percent. Oil exports alone increased by more than $20 billion between 2004 and 2005. Of the total increase in export values between 2000 and 2005, fuels accounted for 65 percent, manufactures 24 percent, and food and raw materials about 5 percent each. Because manufactures include processed natural resources, the extent to which sub-Saharan Africa’s export boom is resource-driven is obvious.

Figure 4.Exports of Major Merchandise Categories, 1985–2005

(Selected years; values in US$ billions)

Source: UN Comtrade.

There is limited evidence of product diversification in the export pattern. In fact, the share of fuels has risen to more than half of total sub-Saharan African exports (Table 1), with annual increases of more than 40 percent in both 2004 and 2005 (Table 2). Food and beverages and raw materials have seen long-term declines, though the share of manufactures has grown since 1985; the upward trend is obscured for 2005 by the large increase in oil exports.

Table 1.Sectoral Composition of Exports(Percent)
198519901995200020042005
Food and beverages18.316.120.112.511.39.1
Raw materials12.314.914.510.29.27.9
Fuels50.041.835.946.947.654.9
Manufactures and chemicals18.626.028.629.631.026.4
Source: UN Comtrade.
Source: UN Comtrade.
Table 2.Growth Rates of Broad Export Categories(Annualized percentage growth of nominal trade values)
1985–901990–951995–20002000–032003–042004–05
Food and beverages1.67.1–1.912.23.3–1.7
Raw materials9.71.10.41.934.34.6
Fuels0.6–1.418.13.742.641.0
Manufactures and chemicals14.43.910.18.430.54.2
Total4.01.99.25.932.222.2
Source: UN Comtrade.Note: The total includes Standard International Trade Classification (SITC) 9, which covers certain special items—notably arms—that are not included in the listed sectoral categories.
Source: UN Comtrade.Note: The total includes Standard International Trade Classification (SITC) 9, which covers certain special items—notably arms—that are not included in the listed sectoral categories.

The emergence of China as an important trade partner for sub-Saharan Africa is most pronounced for fuels and raw materials (Table 3). From a small percentage in 1990, China’s share increased to one-fourth of raw materials and one-sixth of fuels in 2005. The share of fuel exports to the United States also rose by a few percentage points. The increases came from a reduction in the EU-15 share. Trade patterns for food and beverages hardly changed between 1990 and 2005.

Table 3.Destination Shares of Broad Export Categories, 1990 and 2005(Percent)
EU-15United StatesIndustrial AsiaChina
Food and Beverages
199078.97.610.90.7
200577.59.98.31.8
Raw Materials
199069.68.213.22.6
200548.67.310.625.5
Fuels
199048.648.62.80.0
200521.552.05.816.3
Manufactures and Chemicals
199063.817.115.20.4
200552.419.317.75.7
Source: UN Comtrade.
Source: UN Comtrade.

Asia’s share in sub-Saharan African manufacturing exports grew only moderately (by about 8 percentage points), mainly from increased Chinese demand. The U.S. share also increased somewhat because of the Africa Growth and Opportunity Act (AGOA). Again, the EU-15 share declined, though Europe still accounts for more than half of sub-Saharan African manufacturing exports, followed by the United States and industrial Asia; exports to other Asian partners are small.

The dependence of sub-Saharan African nonfuel exports on agricultural commodities has declined and that of certain resource-linked manufacturing products has increased (see Appendix Table A1). Manufactured exports accounted for nearly 60 percent of all nonfuel exports in 2005, up from 37 percent in 1985. Within manufacturing, the major categories are precious stones, whose share has more than tripled since 1985, and silver and platinum, whose share has nearly doubled. Iron, aluminum, clothing, and vehicles are the other major product categories. By contrast, the share of most nonmanufacturing categories, especially coffee and cocoa, declined. Among the exceptions are the shares of fruit and nuts and fish, but together these account for just over 6 percent of nonfuel exports.

The evidence is mixed on whether the recent growth improvement in sub-Saharan African is associated with higher exports, including those of manufactures. Sub-Saharan Africa’s oil importers on average saw an increase in annual growth of about 2 percent between 2000 and 2005 and an increase of about 2 percentage points in the exports-to-GDP share over the same period.5 However, the relationship is somewhat weaker at the country level. Whereas fast growers like Tanzania, Zambia, Ethiopia, and Kenya have higher export shares, other countries, such as Ghana and Namibia, have grown while the export shares declined. Furthermore, some countries (for example, Lesotho and Swaziland) have seen sizable increases in export shares without any surge in growth. Similarly, there is no clear relationship between growth and an increased share of manufactures in total exports. Several countries (concentrated in southern Africa) have registered large increases in the share of manufactured exports, but others (Ethiopia, Tanzania, and Uganda) are growing rapidly with shares at 15 percent or less.

Export Patterns by Sub-Saharan African Country Grouping

It is often argued that trade patterns are influenced by geography, as are growth prospects generally (Gallup, Sachs, and Mellinger, 1998). In this section, countries are classified as resource-intensive, with subgroups oil and non-oil; and non-resource-intensive, with subgroups coastal and landlocked. These groupings follow Collier and O’Connell (2007). A country is classified as resource-intensive if primary commodity rents—that is, revenue minus extraction costs—exceed 10 percent of GDP. In terms of location, countries are classified by whether they have ocean access (coastal) or are landlocked. A country is classified as landlocked if its access to the ocean is limited and the limited access is likely to be a significant impediment to trade.6

Although the destination of exports of sub-Saharan Africa’s oil-producing countries is changing, those exports have become even more concentrated in fuels (Table 4, top panel). Since 1990, the share of fuels in total exports of the oil-producing countries has increased by about 12 percentage points, to almost 90 percent. The EU-15 share in oil exports fell by more than half, to about 20 percent; Asian destinations expanded their share to 23 percent; and the U.S. share rose by more than 5 percentage points, to 58 percent. In other product groups, the EU-15 is still the largest destination, although its share has declined in favor of the United States (mainly in manufacturing and food and beverages) and Asia (mainly in raw materials7 and to a lesser extent manufactures).

Table 4.Merchandise Exports by Geographic Grouping, Destination, and Product, 1990 and 2005(Percent)
DestinationYearRaw MaterialsFood and BeveragesFuelsManufacturesTotal
Oil Producers
EU-15199078.487.646.994.255.5
200556.076.619.274.124.3
United States19902.710.552.14.742.0
20054.919.557.815.653.4
Asia199018.91.81.41.12.5
200539.13.823.010.322.3
Of which: China19903.50.20.40.40.3
200529.50.514.72.714.2
Product share of total exports19907.99.277.94.9
20053.34.789.72.1
Coastal
EU-15199068.276.573.259.666.6
200543.379.691.747.556.0
Excluding South Africa199074.777.654.067.972.6
200545.284.032.975.573.4
Asia199023.118.423.617.519.5
Excluding South Africa199019.115.15.620.818.0
200546.211.92.74.914.1
Of which: China Excluding South Africa19900.40.40.20.40.5
19902.80.43.61.31.3
200532.41.10.00.25.6
Product share of total exports199020.523.19.045.0
200512.814.67.660.6
Excluding South Africa199018.138.11.339.6
200515.738.70.943.7
Landlocked
EU-15199062.774.89.877.370.6
200534.369.833.748.150.0
United States19904.113.290.210.515.0
20052.012.259.538.023.2
Asia199033.212.10.012.314.4
200563.818.06.813.926.8
Of which: China19903.13.00.00.71.6
200540.18.40.01.713.0
Product share of total exports199014.427.54.849.9
200527.627.66.040.5
Source: UN Comtrade.
Source: UN Comtrade.

Coastal countries are highly dependent on exports to the EU-15, particularly of manufactures (Table 4, middle panel), which since 1990 have risen to about 60 percent of total exports. The EU-15 is still the dominant destination for all export categories, though in manufactures and raw materials exports its share and that of the United States have declined, mostly because of increased demand from Asia. Coastal countries other than South Africa are even more dependent on the European Union and export nearly the same quantity of food and beverages as manufactures; for this group, since 1990 the share of manufactures is up by only 4 percentage points.

Landlocked countries are also dependent on the European Union, but Asia is becoming more important to them as a trading partner (Table 4, bottom panel). Compared with coastal countries, their exports are less concentrated in manufactures; raw materials and food and beverages have substantial shares, which have been steady or higher since 1990 as the share of manufactured exports has declined. The United States in recent years joined the EU-15 as a dominant export destination for manufactures because of its growing textile imports under AGOA. China and other Asian countries replaced the European Union as the main destination for raw-material exports, principally raw cotton. Nevertheless, the trade pattern for coastal and landlocked countries is still heavily influenced by the traditional mode of exporting raw commodities to industrial countries. The global trade regime facing sub-Saharan Africa features much less tariff escalation than in the past, owing in part to extensions of the Generalized System of Preferences, such as AGOA and the European Union’s Everything But Arms (EBA) initiative. However, a variety of constraints mitigate the impact of these liberalizing measures, lending persistence to the historic trade pattern (see Chapter 4).

Sub-Saharan Africa’s Import Pattern

Several aspects of sub-Saharan Africa’s import pattern are of interest, including the fuel share, increased orientation toward Asia, and the role of manufactured imports. As global oil prices surged, there was a concern that higher fuel import bills would squeeze other imports in low-income countries. One cushioning factor was the continued decline in the relative price of manufactures, of which the region is a net importer. This reflects the emergence of East Asia as an exporter of low-cost manufactured goods.

From a growth perspective, the composition of manufactured imports is also of interest, because imports may be a source of embodied technical change. This is more likely for imports of machinery than consumer products. However, sub-Saharan Africa’s restrictive trade regime has raised the price of imports and placed users of imported intermediate inputs and capital goods at a particular disadvantage. Recent data may reveal whether the region’s improving growth prospects have been accompanied by any change in import composition.

Sub-Saharan Africa’s oil importers did not see an increase in the share of fuel in total imports between 2000 and 2005, which was just under 14 percent in 2005. Though there was an increase of nearly 3 percentage points in the fuel share between 1995 and 2000, the share declined between 2000 and 2005 (Figure 5a). Another manifestation of these movements is that the growth in fuel import value far exceeded that of total imports between 1995 and 2000; between 2000 and 2005, fuel imports grew at a similar rate again, but total imports grew by nearly 20 percent over the same period (Figure 5b). The differential behavior of oil relative to total imports in the two periods is not as surprising as it might first appear. Dudine and others (2006) calculate that the oil price increase over 1998–2000 (from $13 a barrel to $28) was larger in real terms (104 percent) than the 2003–05 oil shock (77 percent).8 Furthermore, the global economy met the prior shock with lower growth (4.3 percent versus 5.1 percent) and higher interest rates (5.9 percent versus 2.3 percent London Inter-Bank Offered Rate, LIBOR), whereas low-income countries met it with lower reserves (3.5 months of import cover versus 4.5 months).

Figure 5a.Oil Importers: Fuel Share of Total Imports, 1995–2005

(Percent)

Source: UN Comtrade.

Figure 5b.Oil Importers: Growth of Fuel and Total Imports, 1995–2005

(Percent)

The relative flatness in the fuel import share between 2000 and 2005 is consistent with previous analysis of the impact of higher oil prices, although it may also reflect gaps in the data. The response of import values will of course depend on the behavior of import volumes. Oil import volumes do show some decline in 2005, and sub-Saharan African oil importers allowed more pass-through of higher oil prices than in the past (IMF, 2006b). Nevertheless, this is probably temporary. Energy consumption is likely to continue growing; when short-term fluctuations are smoothed out, data on petroleum consumption show a steady expansion by about 2.5 percent annually from 1981 through 2004.9 U.S. Energy Information Administration (EIA) data confirm a slight decline in sub-Saharan Africa’s energy intensity in 2004 compared with 2003, whereas growth increased sharply (from 3.1 to 5.2 percent for oil importers). Over the longer term, sub-Saharan Africa’s energy intensity has increased in contrast with the pattern in most other parts of the world.10 China’s energy intensity fell by nearly 40 percent from 1990 to 2004, a period of extremely rapid growth. Finally, oil-import data in sub-Saharan Africa are particularly unreliable because of leakage from transit trade, other customs corruption issues, and smuggling.

The relatively mild impact of higher oil prices on the composition of imports should be seen in the context of generally rising imports in this decade. Imports as a share of GDP for oil importers increased from 29 percent on average for 1997–2001 to nearly 37 percent in 2006. Meanwhile, their current account balances deteriorated by 3 percentage points, though oil imports alone explain only part of these changes. For example, IMF (2006a) found a weak relationship between current account changes and higher oil prices in 2005; about half of oil-importing countries saw a deterioration in the current account that exceeded the impact of higher oil prices. The relatively mild impact was not confined to sub-Saharan African countries. Dudine and others (2006) found that oil imports of the typical Poverty Reduction and Growth Facility (PRGF) country rose by 1.4 percent of GDP between 2003 and 2005, but exports rose by 1.7 percent of GDP and non-oil imports by 3.5 percent of GDP, suggesting that other imports were not compressed. By contrast, imports as a share of GDP for sub-Saharan African oil importers barely increased during the previous oil price increase from 1998 to 2000, so the increased oil import bill imposed a sharper squeeze on other imports. Sub-Saharan Africa’s aggregate nonfuel imports are dominated by manufactures and food and beverages, and both have seen a shift in source away from the EU-15 toward Asia (see Figure 6). Manufactures account for about 85 percent of nonfuel imports, and food and beverages make up most of the rest. The EU share was about 50 percent for both categories in 2005, down 15–20 percentage points from 1990—the amount by which the Asian share increased over the same period.

Figure 6.Sub-Saharan African Import Shares for Selected Products and Trade Partners, 1990 and 2005

(Percent)

Source: UN Comtrade.

Nonfuel imports showed little change in product composition across geographic groups between 1990 and 2005, although there is a significant source shift from the EU-15 to China (Table 5). There is little other variation across country groups in the product shares, although oil-producing countries have a higher food and beverage share than the others. The more pronounced changes are in import sources. For oil-producing countries and landlocked countries, the EU share, which was about 75 percent in 1990, had fallen to the mid-50s by 2005. The EU share of 61.6 percent for coastal countries in 1990 fell to only about 50 percent in 2005. On the other hand, the Asian share of imports increased sharply for all groups between 1990 and 2005, with China accounting for much of the increase. The Chinese import share was up from about 1 percent in 1990 to about 13 percent for all groups in 2005. Not surprisingly, the Chinese surge is in turn attributable almost entirely to an increased share of sub-Saharan Africa’s manufactured imports, though other Asian countries are also important sources for these products, with the overall Asian share between 30 percent and 40 percent for all groups in 2005.

Table 5.Merchandise Imports by Geographic Grouping, Destination, and Product, 1990 and 2005(Percent of total nonfuel imports)
DestinationYearRaw MaterialsFood and BeveragesManufacturesTotal
Oil Producers
EU-15199071.388.471.374.1
200563.361.149.654.0
United States19909.09.09.99.8
200514.014.812.813.4
Asia199019.73.818.716.2
200522.718.137.732.6
Of which: China19900.20.40.70.6
20054.02.515.712.9
Product share of total nonfuel imports19901.114.083.6
20051.012.384.6
Coastal
EU-15199061.650.063.462.4
200546.950.051.551.5
United States199024.014.89.510.5
200517.610.09.09.3
Asia199014.424.227.127.0
200535.640.139.539.2
Of which: China19900.83.20.91.1
20056.16.114.213.0
Product share of total nonfuel imports19901.96.789.9
20051.36.389.0
Landlocked
EU-15199057.381.975.475.7
200568.457.657.157.5
United States199032.613.98.49.8
200521.337.412.215.9
Asia199010.14.216.213.5
200510.35.030.630.6
Of which: China19900.01.11.31.2
20050.51.815.713.6
Product share of total nonfuel imports19901.910.885.6
20051.412.982.9
Source: UN Comtrade.
Source: UN Comtrade.

The share of capital goods (machinery and transport equipment) in sub-Saharan African imports has increased since 2000, and a small range of products accounts for a sizable share of such imports. This share was 36 percent in 2005, up from 32 percent in 2000; the share of such goods in China’s exports to sub-Saharan Africa was also 36 percent, up from 28 percent in 2000.11 This is consistent with an increase in sub-Saharan Africa’s total investment as a share of GDP over the same period.

Sub-Saharan Africa’s manufacturing imports show virtually no shift toward increased shares of intermediate investment goods, except in a few specific industries. Table 6 lists the major product import categories at the three-digit level for all those that accounted for at least 1 percent of total sub-Saharan African manufacturing imports. Motor vehicle imports accounted for just under 20 percent of total imports in 2005, up 2 percentage points from 1985.

Table 6.Import Shares of Major Product Categories(Percent, ranked by 2005 shares)
Share of Manufacturing Imports
CategoryProduct Code198519952005
Motor vehicles73217.715.119.6
Parts for machinery and appliances71912.211.010.0
Ships and boats7359.714.98.9
Telecom equipment7244.45.68.3
Machines for mills, construction, etc.7185.45.67.3
Office machines7143.64.34.5
Aircraft7343.12.24.1
Power-generating machinery7114.53.73.8
Electrical power machinery and circuits7224.53.33.7
Other electrical machinery7293.53.63.0
Clothing (non-fur)8411.42.52.7
Textile yarn and fabric6531.72.72.0
Cotton fabric6521.42.41.9
Metal tools and containers6981.51.51.4
Pearls and precious stones6670.10.31.3
Tubes and pipes6782.00.81.3
Home electronics7250.70.91.0
Iron sheets6741.71.61.0
Share of above in total manufacturing imports79.482.085.8
Source: UN Comtrade.Note: The categories use the three-digit Standard International Trade Classification (SITC) and are those that accounted for at least 1 percent of total sub-Saharan African manufacturing imports in 2005.
Source: UN Comtrade.Note: The categories use the three-digit Standard International Trade Classification (SITC) and are those that accounted for at least 1 percent of total sub-Saharan African manufacturing imports in 2005.

Other significant import categories are machine parts, ships, telecom equipment, aircraft, office machines and certain types of machinery, notably that used in construction and mining, paper mills, and food processing. The doubling of the share of telecom equipment between 1985 and 2005 is consistent with the emergence of cell phones, for which Africa is one of the fastest-growing markets. Cell phone subscriptions grew 60 percent annually between 1994 and 2005 (IMF, 2007). Cotton fabric, an essential input for the region’s textile industry, accounts for just 2 percent of total manufacturing imports.

More disaggregated data reveal some differences in manufactured import pattern by geographic group. Table 7 lists the major product import categories at the three-digit level, indicating all those that accounted for at least 5 percent of total group manufacturing exports. Motor vehicle imports are significant in all four groupings, and highest for coastal countries at nearly 23 percent. The motor vehicle import share does not necessarily rise over time; in fact, except for the coastal groups, there is a tendency for that share to decline, whereas the share of telecom equipment increases.12 Other significant imports include aircraft, ships and boats, and certain types of machinery, notably that used in construction and mining, paper mills, and food processing. Disaggregation of the key product categories from Table 7 indicates the rising importance of imports of electrical equipment, computers, telecom equipment, and construction machinery. Looking at import values, rapid growth in telecom equipment imports is a common factor across all geographic groups (Figure 7). However, although sub-Saharan Africa may be able to reap productivity gains as a user of imported technology, the data do not show a surge in imports of machinery used for manufacturing.

Table 7.Import Shares of Disaggregated Product Categories(Percent, ranked by 2005 shares)
CategoryProduct CodeShare of Manufacturing Imports
198519952005
Oil Producers
Machines for mills, construction, etc.7186.49.914.0
Ships and boats7351.35.613.2
Motor vehicles73218.514.712.4
Parts for machinery and appliances71913.313.111.5
Telecom equipment7243.44.18.6
Electrical power machinery and circuits7224.94.15.3
Coastal
Motor vehicles73215.513.922.7
Parts for machinery and appliances71911.410.59.0
Ships and boats73517.519.68.8
Telecom equipment7244.76.08.0
Office machines7145.65.05.3
Aircraft7342.01.94.8
Landlocked
Motor vehicles73224.624.815.8
Telecom equipment7246.55.511.1
Aircraft7343.22.59.7
Parts for machinery and appliances71912.411.28.8
Machines for mills, construction, etc.7185.77.88.4
Office machines7141.73.06.1
Textile yarn and fabric6531.92.35.9
Non-Oil Resource-Intensive
Motor vehicles73222.518.117.2
Machines for mills, construction, etc.71811.69.211.1
Telecom equipment7244.86.58.9
Parts for machinery and appliances71916.710.88.5
Ships and boats7351.20.57.3
Source: UN Comtrade.Note: The categories use the three-digit Standard International Trade Classification (SITC) (Rev. 1) and are those that accounted for at least 5 percent (approx.) of total group manufacturing imports in 2005.
Source: UN Comtrade.Note: The categories use the three-digit Standard International Trade Classification (SITC) (Rev. 1) and are those that accounted for at least 5 percent (approx.) of total group manufacturing imports in 2005.

Figure 7.Fastest-Growing Major Product Categories by Geographic Group

(Annual percentage rate, 1990–2005)

Source: UN Comtrade.

A Closer Look at Sub-Saharan Africa’s Manufacturing Exports

In all country groupings, sub-Saharan Africa’s exports of manufactures are confined to a few product categories (Table 8). Seven industries13 account for 75–80 percent of those exports: nonferrous metals and nonmetallic mineral manufactures (mainly diamonds) each account for about 30 percent of the total. Transport equipment (10 percent) and clothing (7 percent) are the fastest-growing categories and are the only two not related to processing of resources.

Table 8.Growth of Major Manufacturing Export Categories by Geographic Group, 1990–2005(Percent)
SITC Code and IndustryGrowth RateShare of Manufacturing ExportsMain Destinations in Descending Order1
Sub-Saharan Africa
68 Nonferrous metals83.029.4Industrial Asia, EU-15, United States
66 Nonmetallic mineral manufactures352.027.6EU-15, United States, China
73 Transport equipment511.69.8EU-15, Industrial Asia United States
84 Clothing209.57.2United States, EU-15, Industrial Asia
Oil Exporters
61 Leather and other animal skin products85.712.4EU-15, Industrial Asia, China
63 Wood and cork manufactures98.920.3EU-15, United States, China
68 Nonferrous metals32.611.8EU-15, China, Developing Asia
Coastal
66 Nonmetallic mineral manufactures289.915.2EU-15, United States, China
67 Iron and steel351.918.7EU-15, Industrial Asia, Developing Asia
68 Nonferrous metals188.133.7Industrial Asia, EU-15, United States
73 Transport equipment530.512.9EU-15, Industrial Asia, United States
Landlocked
66 Nonmetallic mineral manufactures104.737.6EU-15, United States, Developing Asia
67 Iron and steel10.210.4EU-15, Industrial Asia, United States
84 Clothing1,424.731.5United States, EU-15, Industrial Asia
68 Nonferrous metals–80.311.6EU-15, Industrial Asia, China
Non-Oil Resource-Rich
68 Nonferrous metals–15.519.7Industrial Asia, China, Developing Asia
66 Nonmetallic mineral manufactures2,145.376.9EU-15, United States, Developing Asia
Source: UN Comtrade.

Fastest-growing destination of the top three is highlighted in bold.

Note: The selected categories are those two-digit groups accounting for at least 5 percent of total manufacturing exports of the sub-Saharan African aggregate and at least 10 percent for the subgroups in 2005. The destination growth rates on which the final column is based are weighted by the 2005 share of that destination in total exports of that category for the relevant group. SITC = Standard Industrial Trade Classification.
Source: UN Comtrade.

Fastest-growing destination of the top three is highlighted in bold.

Note: The selected categories are those two-digit groups accounting for at least 5 percent of total manufacturing exports of the sub-Saharan African aggregate and at least 10 percent for the subgroups in 2005. The destination growth rates on which the final column is based are weighted by the 2005 share of that destination in total exports of that category for the relevant group. SITC = Standard Industrial Trade Classification.

Although Europe is still the dominant destination for manufacturing exports, Asian destinations are becoming more important for oil-producing and coastal countries. Asia is the fastest-growing destination for manufacturing exports of oil-producing countries, which tend to be raw-material-based, such as wood and leather; however, these are a tiny proportion of total exports from oil-producing countries. For coastal countries, the EU-15 is usually the most popular destination in the four main manufacturing categories, although industrial Asia is the dominant destination for nonferrous metals. The manufacturing exports of some landlocked countries also reflect the commodity boom, but the most pronounced development is the surge in exports of clothing. Exports of nonmetallic mineral manufactures dominate for non-oil resource-intensive countries.14

South Africa, along with other southern African countries, dominates most manufactured export categories in sub-Saharan Africa (Table 9). Eleven product categories account for 84 percent of all sub-Saharan African manufacturing exports. For seven of these, the EU-15 is the most popular destination, and for seven of them, South Africa is the dominant supplier. The products for which South Africa is not in the top two suppliers reflect resource endowments (diamonds in Botswana, copper in Zambia, and hydroelectricity in Mozambique) and the emergence of a significant textile industry (Mauritius and Madagascar).

Table 9.Top Two Markets and Suppliers of Major Manufacturing Exports, 2005
IndustryValue (millions of dollars)Growth 2000–05 (percent; annual)Market 1Market 2Supplier 1Supplier 2
Veneers, plywood boards, and other wood791.121.1EU-15Industrial AsiaSouth AfricaGhana
Pearls and precious stones9,174.515.4EU-15United StatesBotswanaSouth Africa
Crude forms of iron3,031.222.3EU-15Industrial AsiaSouth AfricaZimbabwe
Iron ingots645.317.6EU-15Developing AsiaSouth African.a.
Sheet iron940.939.0EU-15ChinaSouth African.a.
Silver and platinum group metals5,518.67.8Industrial AsiaUnited StatesSouth African.a.
Copper890.633.5ChinaDeveloping AsiaZambiaSouth Africa
Aluminum2,632.023.4EU-15Industrial AsiaMozambiqueSouth Africa
Nonelectrical machinery and appliances1,542.7EU-15United StatesSouth African.a.
Road motor vehicles2,358.523.1Industrial AsiaEU-15South African.a.
Clothing, except fur2,401.47.5United StatesEU-15MauritiusMadagascar
Source: UN Comtrade.Note: The industries correspond to three-digit SITC product categories. Where the second supplier is n.a., the first supplier accounts for 100 percent of exports.
Source: UN Comtrade.Note: The industries correspond to three-digit SITC product categories. Where the second supplier is n.a., the first supplier accounts for 100 percent of exports.

The levels of clothing exports reflect the positive impact of AGOA and the mixed impact of the elimination of remaining bilateral quotas on textiles and clothing. The latter occurred under the WTO Agreement on Textiles and Clothing (ATC) at the end of 2005. Although this had a negative effect on some countries, the ATC has not eliminated sub-Saharan Africa’s textile industry.15 Clothing exports are important for Lesotho and Swaziland, as well as Mauritius and Madagascar (see Table 9). Textile exports from less-developed countries under AGOA—which has been extended to 2012—get duty- and quota-free access to U.S. markets even when third-country fabric is used.16 Even for exports to Europe, Asian firms have sought to diversify their production base by locating in Africa, partly because “excessive” penetration of European markets by Asian firms has been a sensitive issue since the ATC quotas expired. Madagascar’s textile industry has performed well after the expiration of the Multi-Fiber Arrangement by graduating to higher-value-added textile exports to Europe. Mauritius has had similar success and records the highest value-added among sub-Saharan African textile exporters to the United States.17

The data on EU-China trade come from Eurostat and reflect a 25-member European Union.

The EU-15 includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

It would be useful to break down the growth in export values into price and volume components, but this task is extremely complex, because it would require disaggregated price data for each exporting country.

The calculation compares average growth and export shares in 2004–06 with 1999–2001, to smooth out single-year fluctuations in 2000 and 2005.

For example, the Democratic Republic of the Congo is classified as landlocked. See also Appendix 1.

Examples of raw-material exports are cotton, flowers, and wood.

Real price changes are based on the U.S. consumer price index.

Aggregate oil import volume data show substantial variations over time, with pronounced decreases in years of relatively low oil prices (1999, 2002) and increases even in times of high and rising prices (2004). The data suggest that oil import volumes are mainly a function not of consumption but of anticipated prices and supply developments and of a commensurate variation of inventories.

See Table 1b in EIA (2006). These data extend only to 2004 and so do not cover the bulk of the recent oil shock.

Capital goods are measured by total imports of Standard International Trade Classification (SITC) product 7, which consists of machinery and transport equipment.

Motor vehicle imports to landlocked countries may be underrecorded if vehicles are driven across the border by owners after purchase in a coastal country.

Based on two-digit SITC.

Industries selected from all manufacturing two-digit categories were those that accounted for at least 10 percent of manufacturing exports and did not experience a large decline between 1990 and 2005. Although clothing exports from landlocked countries have grown strongly since 1990, the high growth rate shown in Table 8 for this category is exaggerated by the fact that Southern African Customs Union (SACU) countries have reported separate country data to Comtrade only since 2000; thus, for example, Lesotho’s exports would be included in 2005 but not in 1990. See Appendix 1.

The ATC was the transitional agreement for phasing out the Multi-Fiber Arrangement.

Mattoo, Roy, and Subramanian (2003) show that AGOA undercuts some of its more liberal provisions with restrictions in its product coverage and application of quotas to the total amount of U.S. textile imports that can receive relief.

This is based on the ratio of the value share to the volume share of textile exports from sub-Saharan African countries to the United States.

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