Incentive policies and agricultural performance in sub-Saharan Africa

Abstract

Exports in general, and agricultural exports in particular, are more responsive to price incentives in Sub-Saharan Africa than in developing countries.. These are the results of an econometric investigation on the effects of real exchange rates on exports. It further appears that in Sub-Saharan Africa the impact of real exchange rates is greater on agricultural exports than on the exports of goods and services. Within Sub-Saharan Africa, market-oriented countries generally gained export market shares while interventionist countries lost shares. This occurred when market-oriented, not interventionist countries, maintained realistic exchange rates and did not bias incentives against exports. For example, Kenya and the Ivory Coast exemplify market-oriented, and Tanzania and Ghana interventionist, countries. Pairwise comparisons between the Ivory Coast and Ghana have indicated the superiority of the market-oriented approach in promoting exports and agricultural production.Economic Theory&Research,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Export Competitiveness,Environmental Economics&Policies,Access to Markets