May 6, 2008
News Release 08-044
Inv. No. 332-477
Contact: Peg O'Laughlin, 202-205-1819

The value of global sub-Saharan African (SSA) exports increased from 2002 to 2006 in nine of 11 industries investigated by the U.S. International Trade Commission (ITC or Commission) in its report Sub-Saharan Africa: Factors Affecting Trade Patterns of Selected Industries.

Internal factors within the region and increased global prices contributed to the export increases, according to the report.

The ITC, an independent, nonpartisan, factfinding federal agency, completed the report for the U.S. Trade Representative. It is the second of three annual reports that provide brief overviews of the trends in SSA exports in the agricultural, mining and manufacturing, and services sectors and profiles of SSA industries within those sectors whose products have shown significant export shifts in recent years. Each industry profile includes an analysis of the leading SSA exporters, their key markets, the leading competitors, and the market and policy factors that have contributed to the increases or decreases in exports.

The second annual report covers industries that produce coffee, shea butter, spices (primarily vanilla, cloves, pepper, and ginger), tropical fruit (primarily bananas and pineapples), footwear, natural rubber, processed diamonds, textiles, wood furniture, aviation services, and communication services. Highlights of the report follow:

• The value of global SSA exports increased in nine of the 11 industries during 2002-06, the period covered by the report, ranging from a 12 percent increase in the value of textile exports to a 262 percent increase in the value of natural rubber exports. For the most part, the nine industries benefitted from three common factors: increased global prices as a result of demand growth exceeding supply growth; investment in new and expanded production capacity; and implementation of policies and programs to promote industrial development, whether targeted to a specific industry or applied generally to all industries.
• The value of global SSA exports declined for three of the selected industries during 2002-06: spices, wood furniture, and the pineapples sector of tropical fruit, industries which experienced decreases of 47 percent, 46 percent, and 5 percent, respectively. Factors contributing to decreased export values or mitigating export growth included increased competition in key markets; low crop yield due to weather; political instability; overproduction; effects of exchange rate changes; reduced resource supply; and increased local demand.
• Government policies to encourage investment and expansion of domestic industries were evident in certain industries. For example, the Namibian government offered incentives in the form of Export Processing Zone status and training grants to foster an export-oriented diamond cutting and polishing industry.
• Investment was critical to the explosion of wireless telephony services in several SSA countries as well as to the increase and upgrade of air fleets by several SSA airlines. Ethiopian Airway's ability to reliably service its market in combination with the flexibility it achieved through the open skies agreements led to plans to expand and upgrade its fleet.
• Some SSA governments, as well as international lenders such as the World Bank, improved infrastructure or production facilities to assist domestic industries. Infrastructure and transportation services improvements were especially beneficial to exports of shea butter, certain tropical fruit, aviation services, and communication services.
• Strengthened ties among members of the Common Market for Eastern and Southern Africa (COMESA) and the formation of the East African Customs Union (EAC) also improved efficiencies and increased regional trade. The establishment of the EAC between Kenya, Uganda, and Tanzania in 2005 likely contributed to the increased level of footwear trade, particularly between Kenya and Uganda, in 2005 and 2006 by liberalizing tariffs on intra-EAC trade while establishing a common external tariff.
• Tariff preferences provided a boost to SSA exports of footwear and textiles. For example, the Cotonou Agreement, which requires the use of regional fabric in apparel receiving duty-free treatment to the EU, and South Africa's elimination of tariffs from Southern African Development Community (SADC) partner members both contributed to increased intra-SSA textile exports during 2002-06.
• Liberalizations in the coffee, communication services, and aviation services sectors in several SSA countries helped to facilitate greater exports. Reduced government intervention in the coffee sectors of several SSA countries allowed producer prices to be linked to higher prices.

Sub-Saharan Africa: Factors Affecting Trade Patterns of Selected Industries (Investigation No. 332-477, USITC Publication 3989, April 2008) will be available on the ITC's Internet site at /publications/332/pub3989.pdf. A CD-ROM of the report may be requested by calling 202-205-2000 or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public unless they are classified by the requester for national security reasons.