liberalization has exposed domestic industries prematurely to competition from cheaper imports.
Tussie, Diana, "The Policy Harmonization Debate: What Can Developing Countries Gain from Multilateral Trade Negotiations?" UNCTAD Review, 1994.
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582. These obstacles notwithstanding, African countries have been making some attempts to diversify their economies and to decrease their reliance on primary export commodities. Thus, the number of export commodities has increased substantially in almost all the African countries, over the last two decades, although the weight
in total exports earnings is still low. (Table X.6)
Table X.6
583. How significant is the experience of diversification in developing Africa, and how useful is i t as a guide to future policy? Three observations are pertinent. In some of the oil-exporting countries, notably Gabon and Nigeria, the diversification and concentration indices have increased in tandem and so is the number of export commodities. Reliance on one or two export commodities (mainly oil) has increased, while non-oil export commodities, though growing in variety, remain insignificant.
584. Some of the non-oil developing countries have reduced their dependence on their major export cOlnmodity by successfully introducing new and non-traditional exports. Morocco and Tunisia in North Africa; Ghana, Senegal and Cote d'Ivoire in West Afric~i
and, Kenya, Tanzania and Zimbabwe in East and Southern Africa , are some good examples,where the main export commodity now provides less than a third of foreign exchange earnings.
585. However, the most spectacular diversification achievement in developing Africa has been made by Mauritius where the number of export commodities increased from only 9 in 1970 to more than 100 in 1990, and the concentration index fell from 93 per cent to 34 per cent. While sugar, the leading export commodity, accounted for 93 per cent of exports in 1970, textiles and apparel, which had become the leading exports, accounted for 34 per cent of exports in 1990. The success of the Mauritian drive in the diversification process owes much to the export processing zone (EPZ) strategy,
86 For an analysis of the development of horticUltural experts countries of East and Southern Africa, such as Ethiopia, Kenya, Malawi, the United Republic of Tanzania and Zimbabwe as a visible effort of di versif ication into traditional products, see UNCTAD: Commodity Export Policies and Strategies in African Countries, in a Process of Structural Adjustment: Cotton, Tea and Horticultural Products, Document No. UNCTAD/COM/47, November, 1994.
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87
adopted in 197087.
586. The EPZ in Mauritius was estimated to have generated 33 per cent of salaried employment, accounted for 88 per cent of manufactured employment, contributed close to 60 jer cent of gross domestic exports, and 15 per cent of GOP by 1988. What makes the experience of Mauritius unique is the extraordinary aChievements.
At the start of the EPZ in 1970, Mauritius had a reasonably literate labour force, a dynamic business community, a well developed infrastructure, and political and social stability. Such structural prerequisites for a dynamic economy were reinforced by a conducive macro-economic environment and effective incentive scheme.
587. Another successful diversification story is in Botswana, where revenues from diamond and cattle, (beef exports), were largely utilized to diversify the economic base, making the country an important exporter of textiles, among other commodities, to markets in southern Africa.
588. The capacity of EPZ to transform the economy, diversify the production base and increase the number of export commodities has become apparent to other African countries. No less than 17 countries from southern to north Africa are emulating the Mauritian experience. Nigeria's EPZ in Calabar became operational in early 1994, while in Zimbabwe, Botswana and Uganda, preparations are underway. However, the one significant lesson from the Mauritian experience is that, while the EPZ programmes can provide possible solutions to the problems of economic diversification, i t does not by itself guarantee success. other policy measures are always needed to create a favourable environment for the diversification process.
5. Declining shares in world trade
589. Africa's share in world trade has declined steadily since 1980. Between 1980 and 1993, when world trade doubled in value, African trade remained at, more or less, the same level in absolute terms. Africa is not only failing to partake in increased world trade, i t has been steadily loosing ground to others. In 1980, AfricaI s share in world trade and in the trade of developing countries was 4.9 per cent and 14.2 per cent, respectively. Since then the share of the continent in global trade has fallen to just over 2 per cent.
Hein, Philippe, "structural Transformation in an Ioland Economy: The Mauritius Export Processing Zone (1971 to 88)", UNCTAD Review, Vol. 1, No.2, 1989 .
88
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590. In the early 1970s, Africa supplied 83.1 per cent of cocoa, 27.6 per cent of coffee, 26.4 per cent of copper, 16.1 per cent of cotton, 12.7 per cent of iron ore and 6 per cent of timber in the world market. Two decades later, the shares of many products have declined precipitously: 60.7 per cent for cocoa, 16.1 per cent for coffee, 13.6 per cent for copper, 11.5 per cent for cotton, 5.6 per cent for iron ore and 3.1 per cent for timber (see Table X.7). In part, this decline is attributable to competition from new producers in Latin America and South Asia, and to the declining demand on account of technological evolution and changing consumer tastes.
591. The loss of market shares has important policy implications for the African countries. First, i t points clearly to the need to devote more efforts to the production of the main export crops, while pursuing the policy of diversification. Efforts should not be limited to increasing production levels, but should at the same time promote the marketing of primary commodities and processed products. Participation in international trade fairs, and strengthening of the commercial offices in embassies would certainly contribute to the expansion of exports, while improvements in quality control should enhance consumer's loyalty.
Efforts to increase market shares outside the Africa region should be supplemented by export promotion in the regional market as well.
Table X.7
6. Little changes in direction of Africa's trade
592. Africa's dependence on the developed countries as predominant suppliers of imports and the markets for the region's exports is an established fact. Developed countries supplied 70 per cent of imports and purchased 80 per cent of the exports in 1993. For historical reasons, EU continues to dominate both imports and exports. In 1993, EU countries accounted for 73 per cent of the region's exports and provided 57 per cent of imports.
593. Despite the dominance of the developed countries in the imports and exports of the region, efforts to shift to the developing countries, in particular the dynamically-industrializing ones, is beginning to emerge. Although these countries have not increased their purchase of African exports substantially, they are nonetheless beginning to account for an increasing share of imports.
Tnble
x.a
594. The value of African exports to developed countries decreased sharply from US$78.7 billion to US$57.3 billion, but, in terms of percentage, it changed only slightly from 82.9 per cent in 1980 to
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