Monday, September 7, 2015

Can Africa Export More than Raw Materials to China?

Bridges Africa, a journal of the International Centre for Trade and Sustainable Development, published on 1 September 2015 an article titled "Trade between China and Sub-Saharan Africa: Can the Reliance on Raw Materials Be Reversed?" by Manitra A. Rakotoarisoa and Cheng Fang, both with the Food and Agriculture Organization.

Only 2.4 percent of China's imports comes from Sub-Saharan Africa and 90 percent of these imports are crude oil and mining products.  Manufactured goods represent less than 5 percent.  On the other hand, some 64 percent of China's exports to Sub-Saharan Africa are manufactured goods. 

Free trade and increases in labor productivity and technology will increase Sub-Saharan Africa's ability to export manufactured goods, but not enough immediately to reduce the high share of raw material exports.  China can help the situation by outsourcing to Sub-Saharan Africa some parts of the processing of value added products.