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Can Export Promotion Agencies Stem the Deindustrialisation in Sub-Saharan Africa?

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Abstract

We investigate how Export Promotion Agencies (EPAs) affect manufacturing outcomes in Sub-Saharan Africa (SSA). Synthetic control methods technique results in employing the cases of South Africa and Mauritius to illustrate the effect. Results indicate an EPA’s adoption drives up manufacturing outcomes significantly. SSA countries without an EPA might have missed out on an opportunity to boost their manufacturing sector. Particularly, manufacturing value added as a share of GDP is about 7.5 and 3 percentage points higher in South Africa and in Mauritius compared to their synthetic counterpart. Jointly adopting EPA and EPZ can be beneficial to manufacturing activities. Since many conditions required for well-functioning financial markets for manufacturing firms to finance their expansion are missing, government intervention through EPA directed at counteracting some distortions may be growth enhancing.

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Notes

  1. 1.

    Often referred to as Trade Promotion Organisation (TPO)

  2. 2.

    The ITC refers to EPA as TPO or Trade Promotion Organisation.

  3. 3.

    Performing the test for the difference between the two variances is important to determining whether to carry out a pooled-variance \(t\) test (which assumes equal variances) or the separate variance \(t\) test (which assumes unequal variance).

  4. 4.

    The evaluation literature stresses the importance of similar outcomes in pre-matching for both groups (see Ashenfelter 1978; Ashenfelter and Card 1985; Card and Sullivan 1988; Heckman et al. 1998).

  5. 5.

    A similar graph for Mauritius is available upon demand.

  6. 6.

    Weil, F. A. (1978). ‘Statement at hearings before the Subcommittee on International Finance of the Committee on Banking, Housing and Urban Affairs.’ Export Policy Part 3, S Senate, 35th Congress, 2nd Session, Washington, DC, in Czintoza and Johnson (1981). See Marcelin and Mathur (2014, 2015, 2016) and Mathur and Marcelin (2014, 2015) for a detailed discussion on the effect of financial development.

  7. 7.

    Appendix shows a list of countries with EPZs. Data on EPZs are obtained from Farole (2010). The table also presents some fiscal schemes and other industrial policies adopted in SSA.

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Author information

Authors and Affiliations

  1. School of Business, Management and Technology, University of Maryland Eastern Shore, Princess Anne, MD, USA

    Isaac Marcelin

  2. Visiting Scholar, Department of Economics, University of Kansas, Lawrence, KS, USA

    Malokele Nanivazo

Authors
  1. Isaac Marcelin
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Correspondence to Isaac Marcelin .

Editor information

Editors and Affiliations

  1. Economic Commission for Africa (ECA), Addis Ababa, Ethiopia

    Adam B. Elhiraika

  2. Economic Commission for Africa (ECA), Addis Ababa, Ethiopia

    Gamal Ibrahim

  3. Economic Commission for Africa (ECA), Addis Ababa, Ethiopia

    William Davis

Appendix

Appendix

Export promotion policies: comparative table, selected SSA countries

 

Botswana

Cameroon

I. Coast

Ghana

Kenya

Mauritius

Nigeria

Rwanda

Senegal

Uganda

Zimbabwe

Incentives for

export activities

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Export processing zones (EPZs)

 

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Export promotion

(manufacturing)

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Standardisation,

Quality improvement for export

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Measures to attract FDI for export activities

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Facilitated credit for non-traditional

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Selective tariff

protection peak/

high tariffs)

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Utilisation of other trade instruments

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Export duties to favour local manufacturing

 

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  1. Source Belloc and Di Maio (2011)

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Marcelin, I., Nanivazo, M. (2019). Can Export Promotion Agencies Stem the Deindustrialisation in Sub-Saharan Africa?. In: Elhiraika, A., Ibrahim, G., Davis, W. (eds) Governance for Structural Transformation in Africa. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-03964-6_6

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  • DOI: https://doi.org/10.1007/978-3-030-03964-6_6

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