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Project

Impact of Asian Drivers on Sub-Saharan Africa

What impact does China’s growing exports of manufactures have on industrialisation in Sub-Saharan Africa (SSA)? Until the end of 2004 SSA exporters of clothing and textiles (most of which went to the US under AGOA preferences) were protected not just by tariffs, but also by quotas limiting Chinese exports into major markets.

When these quantitative restrictions were lifted, Chinese clothing and textile exports into the US surged. By contrast, SSA clothing exports to the US fell by 17 per cent in 2005, and for some countries (such as South Africa), the fall (45 per cent) was even greater. The reason why the decline in SSA was not even greater was that (with the exception of South Africa and Mauritius), SSA clothing exporters were allowed to use fabrics and other inputs imported from China and other low-cost Asian suppliers.

Without this incentive, it is likely that SSA clothing exports would have been decimated. In the furniture industry, where there have been no quotas and where tariffs are much lower, SSA exports are drying up and competition from Asian imports is increasing in domestic markets. Import competition in the clothing sector has also led to substantial loss in employment in many SSA countries, as it has in the footwear industry.

This poses a significant challenge to SSA industrialisation, not just for those countries with an existing industrial base, but also for SSA economies which may seek to diversify their economic base in the future.

Project details

start date
1 April 2005
end date
30 December 2005
value
£0

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