Chapter 12: Commodity prices and export performance in sub-Saharan African countries
In the 1980s and 1990s sub-Saharan Africa’s export performance was typically portrayed as being extremely poor, particularly when compared to other regions in the developing world. However, when export performance is analysed in volume terms a rather different picture emerges. Export volumes actually expanded rapidly during the period of low commodity prices at a significantly faster rate than during the post-2001 period of high prices. This chapter analyses this apparent paradox, and discusses various plausible explanations for the underlying determinants of export volumes, with data for 16 commodity exporters over the period 1981–2008.The results highlight the importance of both the real exchange rate and demand conditions in trading partners as well as confirming an inverse relationship between higher commodity prices and export volumes. The chapter concludes that higher prices give a misleading impression of improved export performance, and that policymakers still need to focus more on its fundamental underlying determinants, including maintaining a competitive exchange rate.
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