Business News Wed, 3 Mar 2004

Undergarments: Africa's only important export item

Accra, March 3, GNA - The 2003 United Nations Conference on Trade and Development (UNCTAD) Report has singled out the manufacturing of undergarments as the only important export item in Africa among manufacturers in world trade.

"Even then, its share in total African exports is only 1.7 per cent with Mauritius and Swaziland accounting for over 85 per cent of the total exports of this product."

The Report, which was jointly launched recently by the Third World Network (TWN) and the United Nations Development Programme (UNDP), painted a rather bleak picture for the continent, saying even though Africa had remained commodity-dependent, it has fallen behind other regions in the world in exports of non-fuel primary commodities. It noted that 17 of the 20 most important export items of Africa were primary commodities and resource-based manufacturers.

The Report said while the structure of developing country exports had changed significantly over the past two decades, Africa has hardly benefited from the boom of manufactured exports.

Africa's share in world merchandise, according to the Report, fell from 6.3 per cent in 1980 to 2.5 in 2,000 in value terms.


"Similarly, its share of total developing country merchandise exports fell to almost eight per cent in 2,000, while its share in manufacture remained at below one per cent," it said.

By comparison, Asia's share of global merchandise exports increased from 18 per cent in 1980 to 22 per cent in 2000, while its share of total developing country merchandise exports increased from almost 60 per cent to 72 per cent over the same period.

Asia's global manufactured goods trade increased threefold, reaching 21.5 per cent in 2000.

The Report noted that these trends indicated that most African countries had been losing market shares in commodity exports to other developing countries while at the same time most had been unable to diversify into manufactured exports.

It attributed Africa's difficulties to its inability to overcome structural constraints and modernise its agricultural sector, combined with the high cost of trading, as well as low investment in the agriculture sector leading to low agricultural productivity.


"As a result," the Report quoted, "Africa has lost its competitive edge in producing cocoa, tea and coffee vis-=E0-vis the new and more efficient producers in Asia and Latin America.

The Report attacked the use of subsidies in these markets and that of the US and EU, which is resulting in the loss of market shares for cotton and sugar and domestic support for less competitive producers.

While the Report welcomes the US African Growth and Opportunity Act (AGOA) and the EU's Everything But Arms (EBA) initiative, it argued that an analysis of the of the EBA in 2001 revealed little use of the scheme owing in part to the fact that the beneficiaries continued utilizing the Lome Protocols which arguably have less restrictive rules of origin.

On AGOA, it said the additional benefits represented a modest expansion over the preferential treatment that the Sub-Saharan Africa already enjoyed under the GSP, adding that had it not been for the restrictive rules of origin governing market access under AGOA, its medium-term benefits would have been five times greater.

Source: GNA