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Trade Diversification in Black Africa

Published online by Cambridge University Press:  11 November 2008

Joanna Moss  and
John Ravenhill
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Extract

Third-World governments have frequently professed the virtues of trade diversification, and they have voiced a number of legitimate concerns about what can happen if this is not achieved. First, the greater the geographical concentration of their export trade, the more vulnerable are they to fluctuations arising from changes in the level of imports, devaluations, or other developments in their principal markets.1 When, for instance, exports were directed predominantly towards the relatively slow-growing European Economic Community in the late 1970s and early 1980s, the exporting countries might have been better off if their outlets had been more diversified. Second, various pressures may be exerted to induce smaller countries to purchase most of their needed imports from the larger trading partner that has bought most of their exports.2 Those with geographically concentrated exports are particularly vulnerable in tariff disputes, or what J. A. Conybeare has termed ‘trade wars’.3 Finally, countries which are particularly dependent on individual export markets are vulnerable to ‘linkage’ pressures – attempts by their powerful partners to utilise economic leverage to force concessions on non-trade issues, often political in nature.4

Type
Articles
Information
The Journal of Modern African Studies , Volume 27 , Issue 3 , September 1989 , pp. 521 - 545
Copyright
Copyright © Cambridge University Press 1989

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References

Page 521 note 1 Lloyd, P. J., International Trade Problems of Small States (Durham, N.C., 1968), p. 46.Google Scholar

Page 521 note 2 Hirschman, A. O., National Power and the Structure of Foreign Trade (Berkeley, 1945).Google Scholar

Page 521 note 3 Conybeare, J. A., Trade Wars (New York, 1987).Google Scholar

Page 521 note 4 While there is no definite aggregate evidence that geographical concentration of exports has a deleterious effect on a country's overall economic growth, some empirical tests of dependency theory have found a negative correlation between trading-partner concentration and rates of economic growth. See, for example, McGowan, Patrick J., ‘Economic Dependence and Economic Performance in Black Africa’, in The Journal of Modern African Studies (Cambridge), 14, 1, 03 1976, pp. 25–40.Google Scholar

Page 522 note 1 We do not discuss the commodity composition of trade in this article. Other aggregate studies show that traditional export commodities remain predominant in African export trade-see Moss, Joanna and Ravenhill, John, ‘Trade Developments During the First Lomé Convention’, in World Development (Oxford), 10, 10, 1982, pp. 841–56,Google Scholar and ‘The Evolution of Trade Under the Lomé Conventions: the first ten years’, in Stevens, Christopher and van Themaat, J. V. (eds.), Europe and the International Division of Labour. EEC and the Third World: a survey 6 (London, 1987).Google Scholar However, some African countries are begining to export non-traditional goods in significant quantities; Stevens, Christopher and Weston, Ann, ‘Trade Diversification: has Lomé helped?’, in , Stevens (ed.), EEC and the Third World: a survey 4. Renegotiating Lomé (London, 1984), and Moss and Ravenhill, ‘The Evolution of Trade’.Google Scholar

Page 522 note 2 Not surprisingly, therefore, in a study that included data only for the 1960–6 period, Stallings, Barbara, Economic Dependency in Africa and Latin America (Beverly Hills, 1972), p. 27, found that ‘African trade [concentration] showed no major differences before and after independence’.Google Scholar

Page 525 note 1 For the purpose of this study, a statistically significant decline or increase is a change based on a one-tailed test at the 5 per cent level of significance. Hereafter, in this article, whenever a decline or an increase is mentioned, it means that it was statistically significant at this same level.

Page 528 note 1 See Moss, Joanna, The Lomé Conventions and their Implications for the United States (Boulder, 1982),Google Scholar and Ravenhill, John, Collective Clientelism: the Lomé Conventions and North-South Relations (New York, 1985).Google Scholar

Page 533 note 1 Moss, Joanna and Ravenhill, John, Emerging Japanese Economic Influence in Africa (Berkeley, 1985).Google Scholar

Page 535 note 1 For reasons for space, the table for the average share of African trade taken by the oilexporting countries has been omitted, but may be obtained from the authors.

Page 535 note 2 Cf. Ravenhill, John, ‘Collective Self-Reliance or Collective Self-Delusion: is the Lagos Plan a viable alternative?’, in , Ravenhill (ed.), Africa in Economic Crisis (New York and Basingstoke, 1986), pp. 85–107.CrossRefGoogle Scholar

Page 535 note 3 The table for the average share of African trade by the communist countries may be obtained from the authors.

Page 537 note 1 The tables for the shares in African trade of Belgium, Portugal, Italy, the Netherlands, and West Germany may be obtained from the authors.