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Pathways to African Export Sustainability
2008 (12 percent to 21 percent of non-fuel exports). Trade within regional communities is even lower. For example, the share of intraregional goods trade in total goods imports is only around 5 percent in the Common Market for Eastern and Southern Africa (COMESA), 10 percent in the Economic Community of West African States (ECOWAS), and 8 percent in the West African Economic and Monetary Union (UEMOA). This compares with over 20 percent in the Association of Southeast Asian Nations (ASEAN), around 35 percent in the North American Free Trade Agreement (NAFTA), and more than 60 percent in the European Union (EU). On the other hand, intra-regional trade in the Southern Cone Common Market (MERCOSUR) is about 15 percent of total imports and less than 8 percent in the Central American Common Market (CACM)—see Acharya et al. (2011). There are, however, substantial informal flows of goods and people across borders in Africa that are not measured in official statistics. Although exports have grown strongly over the last decade, and even though the region’s trade has recovered well from the global crisis, the impact of this recovery on unemployment and poverty has been disappointing in many countries. Unemployment remains around 24 percent in South Africa. In Tanzania, the percentage of people living in extreme poverty (less than US$1.25 a day) appears to have remained broadly constant—around 35 percent of the population. In Burkina Faso, income poverty has been stagnant since 1997. This is because export growth has typically been fueled by a small number of mineral and primary products with limited impact on the wider economy, and because formal sectors remain small in many countries, such as Burkina Faso. Hence, key objectives in Africa remain to diversify the export base away from dependence on commodities and to build on the increasing number of export success stories, thus allowing more people to participate in trade. Therefore, for this study, a key issue is whether increased export survival rates in Africa would not only support sustained export growth but also lead to a more diversified and inclusive export structure.
Export Survival: An “African Exception”? We saw that Sub-Saharan Africa stands out for its low survival as both a source and a destination of exports. Is this low survival truly a specifically Sub-Saharan African characteristic? We cannot answer this question before controlling for other determinants of export survival. This will be the object of much of this study, but we start with the most obvious suspect—income levels.