Hostname: page-component-586b7cd67f-vdxz6 Total loading time: 0 Render date: 2024-11-24T23:39:45.111Z Has data issue: false hasContentIssue false

Exchange Rates and the Management of the External Sector in Sub-Saharan Africa

Published online by Cambridge University Press:  11 November 2008

Extract

The performance of Africa's external sector during the 1970s has been described in a number of important publications. According to the United Nations Economic Commission for Africa, the continent's share of world exports declined from 3·9 per cent in 1970 to 3·4 per cent in 1979. The performance of the region's export sector had been sluggish throughout this period, growing at an annual rate of only 0·6 per cent in volume compared to 6 per cent during the last five years of the previous decade. The World Bank report on sub-Saharan Africa described the 1970s as having been characterised by growing balance-of-payments deficits, attributable partly to external factors — notably the two large oil-price shocks, the slow growth in world trade in primary commodities, and the persistently rising price of imported manufactured goods — but partly caused also by domestic factors. Even within the group of developing countries, Africa's share of non-fuel exports is estimated to have declined from over 18 per cent in 1970 to about 9 per cent in 1978. During this decade the volume of imports expanded by an estimated 58 per cent annually — although for the sub-Saharan region the growth rate was only 3 per cent — while the terms of trade worsened significantly. Official development assistance rose substantially as a whole, but offset only a part of the growing deficit.

Type
Articles
Copyright
Copyright © Cambridge University Press 1984

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

page 451 note 1 United Nations Economic Commission for Africa, ECA and Africa's Development, 1983–2008 (Addis Ababa, 1983), pp. 1314.Google Scholar

page 451 note 2 International Bank for Reconstruction and Development, Accelerated Development in Sub-Saharan Africa (Washington, D.C., 1981), ch. 3.Google Scholar

page 451 note 3 Ibid. Table 3.4, p. 19.

page 452 note 1 African Development Bank–Economic Commission for Africa, Economic Report on Africa, 1984 (Abidjan and Addis Ababa, 1984).Google Scholar

page 452 note 2 African Development Bank Group, Annual Report (Abidjan, 1983).Google Scholar

page 452 note 3 International Monetary Fund, World Economic Outlook (Washington, D.C.), 1982 and 1983.Google Scholar It is unlikely that developments in 1983 could have led to a significant reversal of the trend in the real effective exchange-rate index.

page 453 note 1 Ibid. 1983, p. 133.

page 453 note 2 Ibid. See also Economic Report on Africa, 1984.

page 453 note 3 For two case-studies, see Rwegasira, Delphin G., ‘Adjustment Policies in Low-Income African Countries: a comparative interpretation of the Kenyan and Tanzanian experiences, 1974–78’, International Monetary Fund, Washington, D.C., 11 1983.Google Scholar

page 454 note 1 O. E. G. Johnson, ‘Issues Related to Exchange Rate Policies in Less-Developed Countries – the Case of Sub-Saharan Africa’, International Monetary Fund, December 1978, for some elements of the disaggregated approach.

page 455 note 1 See, for instance, Chenery, H. B. and Keesing, D. B., The Changing Composition of Developing Country Exports (Washington, D.C., 1979), World Bank Staff Working Paper No. 314;Google Scholar and Goldstein, M. and Khan, M. S., Effects of a Slowdown in Industrial Countries on Growth in Non-Oil Developing Countries (Washington, D.C., 1982), International Monetary Fund Occasional Paper No. 12.Google Scholar

page 455 note 2 Johnson, op. cit. p. 2.

page 456 note 1 Behrman, J. R., ‘Monopolistic Cocoa Pricing’, in American Journal of Agricultural Economics (Urbana, Ill.), 58, 08 1968.Google Scholar

page 456 note 2 See, for instance, Maitha, J. K., ‘Productivity Response to Price: a case study of Kenyan coffee’, in Eastern African Economic Review (Nairobi), 2, 12 1970;Google Scholar D. J. Ford, ‘Long-Run Price Elasticities in the Supply of Kenyan Coffee: a methodological note’, in ibid. 3, June 1971; and De Vries, J., Structure and Prospects of the World Coffee Economy (Washington, D.C., 1975), World Bank Staff Working Paper No. 208.Google Scholar

page 456 note 3 Gwyer, G. D., ‘Long- and Short-Run Elasticities of Sisal Supply’, in Eastern African Economic Review, 3, 12 1971.Google Scholar

page 456 note 4 Olayemi, J. K. and Olayide, S. O., ‘The Structure of Price Response in Nigerian Rubber Production: a polynomial lag model’, in Malayan Economic Review (Singapore), 20, 10 1975.Google Scholar

page 456 note 5 See, for instance, V. P. Diejomaoh, ‘Rural Development in Nigeria: the role of fiscal policy’, Annual Conference of the Nigerian Economic Society, March 1972.

page 456 note 6 See, for instance, Frederick, K. D., ‘The Role of Market Forces and Planning in Uganda's Economic Development, 1900–1938’, in Eastern African Economic Review, 1, 1969;Google Scholar George Alibaruho, ‘Regional Supply Elasticities in Uganda's Cotton Industry and the Declining Level of Cotton Output’, in ibid. 6, 1974; and Medani, A. J., ‘The Supply Response of African Farmers in Sudan to Price’, in Tropical Agriculture (Guildford), 47, 07 1970.Google Scholar

page 456 note 7 Dean, E. R., Supply Response of African Farmers (Amsterdam, 1966).Google Scholar

page 456 note 8 Feltenstein, A., Goldstein, M., and Schadler, S. M., A Multilateral Exchange-Rate Model for Primary Producing Countries (Washington, D.C., 1979), International Monetary Fund Staff Papers, Vol. 26, No. 3.Google Scholar

page 457 note 1 See Johnson, Omotunde, ‘Macrodisequilibrium — the Zaïrian Experience, 1967–81’, International Monetary Fund, Washington, D.C., 09 1982.Google Scholar For Latin America, see Teigeiro, J. D. and Elson, R. A., The Export Promotion System and the Growth of Minor Exports in Columbia (Washington, D.C., 1973), International Monetary Fund Staff Papers, Vol. 20, No. 2;Google Scholar and Cline, W. R., ‘Economic Stabilisation in Peru’, in Cline, and Weintraub, S. (eds.), Economic Stabilisation in Developing Countries (Washington, D.C., 1981).Google Scholar

page 457 note 2 For further details, see Bond, Marian, Agricultural Responses to Prices in Sub-Saharan African Countries (Washington, D.C., 1983), International Monetary Fund Staff Papers, Vol. 30, No. 4.Google Scholar

page 457 note 3 Rwegasira, op. cit.

page 458 note 1 See Kenya, , Statistical Abstract (Nairobi, 1979), p. 103.Google Scholar

page 458 note 2 Note that the relevant periods are from 1973–4 to 1978–9 for Tanzania and from 1975 to 1978 for Kenya, as agricultural prices were significantly revised in 1974 and 1975, respectively.

page 458 note 3 See de Wilde, J. C., ‘Case Studies: Kenya, Tanzania and Ghana’, in Bates, R. H. and Lofchie, Michael F. (eds.), Agricultural Development in Africa: issues of public policy (New York, 1980).Google Scholar

page 459 note 1 For some supportive evidence, see Bond, op. cit.

page 459 note 2 Accelerated Development in Sub-Sakaran Africa, p. 62.

page 459 note 3 Ellis, Frank, ‘Agricultural Price Policy in Tanzania’, in World Development (Oxford), 10, 4, 1982.Google Scholar

page 459 note 4 See, for instance, Frank Ellis and Ellen Hank, ‘An Economic Analysis of the Coffee Industry in Tanzania, 1969/70–1978/79: towards a higher and more stable producer price’, University of Dar es Salaam, Economic Research Bureau Paper No. 80, 1981.

page 461 note 1 For a relevant case-study, see Low, P., ‘Export Subsidies and Trade Policy: the experience of Kenya,’ in World Development, 10, 4, 1982.Google Scholar

page 461 note 2 Where domestic manufacturing production is expanding relatively rapidly but not matched by export growth, it can be concluded that the export problem partly results from excess domestic absorption. This was, for instance, experienced in Kenya in the period 1974–8– see Rwegasira, op. cit.

page 461 note 3 Ibid.

page 462 note 1 For an extensive analysis of this relationship, see Cline, W. R. et al. , World Inflation and the Developing Countries (Washington, D.C., 1981).Google Scholar

page 465 note 1 I am indebted to Reginald H. Green for this important point.

page 465 note 2 For some details on these matters, see Commonwealth Secretariat, Towards a New Bretton Woods (London, 1983);Google Scholar and Brandt, Willy et al. , Common Crisis North-South: cooperation for world recovery (Cambridge, Mass., 1983).Google Scholar

page 466 note 1 I.B.R.D., Sub-Saharan Africa: progress report on development prospects and programmes (Washington, D.C., 1983), pp. 34.Google Scholar

page 466 note 2 Ibid.