Table of Contents

Handbook on Trade and Development

Handbook on Trade and Development

Edited by Oliver Morrissey, Ricardo Lopez and Kishor Sharma

This Handbook comprehensively explores the complex relationships between trade and economic performance in developing countries. Insightful chapters cover issues such as trade, growth and poverty reduction; trade costs, facilitation and preferences; sub-Saharan Africa’s reliance on trade in primary commodities, informal cross-border trade, agglomeration and firm exporting; imported technology, exchange rates and the impact of firm exporting; the increasing importance of China in world trade and links between FDI and trade. This Handbook provides an essential overview of trade issues facing developing countries.

Chapter 12: Commodity prices and export performance in sub-Saharan African countries

Andrew Mold and Annalisa Prizzon

Subjects: development studies, development economics, economics and finance, development economics, international economics

Abstract

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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