ITC report: sub-Saharan Africa sees boost in 9 export industries

ITC report: sub-Saharan Africa sees boost in 9 export industries The U.S. International Trade Commission found during a recent investigation that the value of global sub-Saharan African exports increased in nine of 11 industries from 2002 to 2006.
   The second of three annual ITC reports on the region covered industries that produce coffee, shea butter, spices (namely vanilla, cloves, pepper, and ginger), tropical fruit (primarily bananas and pineapples), footwear, natural rubber, processed diamonds, textiles, wooden furniture, aviation services and communications services.
   During the 2002-2006 period, textile exports by value from sub-Saharan Africa increased 12 percent and natural rubber exports by value increased 262 percent.
   The ITC found that for the most part the nine successful industries benefited from three factors:
   ' Increased global prices as a result of demand growth exceeding supply growth.
   ' Investment in new and expanded production capacity.
   ' Implementation of policies and programs to promote industrial development.
   Strengthened ties among members of the Common Market for Eastern and Southern Africa (COMESA) and the formation of the East African Customs Union (EAC) also improved efficiencies and increased regional trade.
   “The establishment of the EAC between Kenya, Uganda and Tanzania in 2005 likely contributed to the increased level of footwear trade, particularly between Kenya and Uganda in 2005 and 2006 by liberalizing tariffs on intra-EAC trade while establishing a common external tariff,” the ITC said.
   The ITC also noted in its report that tariffs preferences provided a boost to sub-Saharan African footwear and textiles exports. For example, the Cotonou Agreement, which requires the use of regional fabric in apparel receiving duty-free treatment to the European Union, and South Africa’s elimination of tariffs from Southern African Development partner members both contributed to increased intra-sub-Saharan African textile exports during 2002-2006.
   “Liberalizations in the coffee, communication services, and aviation services sectors in several SSA (sub-Saharan African) countries helped to facilitate greater exports,” the ITC added. “Reduced government intervention in the coffee sectors of several SSA countries allowed producer prices to be linked to higher prices.”
   The three industries that experienced declines were spices (down 47 percent), wood furniture (46 percent), and pineapples (5 percent). The ITC noted that the declines in export value were caused by:
   ' Low crop yields due to weather.
   ' political instability.
   ' Overproduction.
   ' Effects of exchange rate changes.
   ' Reduced resource supply.
   ' Increased local demand.
   The complete ITC report, Sub-Saharan Africa: Factors Affecting Trade Patterns of Selected Industries (Investigation No. 332-477, USITC Publication 3989, April 2008), is available online at https://hotdocs.usitc.gov/docs/pubs/332/pub3939.pdf.