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Unit 4 Macro: Primary Export Dependence
15th September 2012
Many lower-income developing nations still relying on specializing in and exporting low value added primary commodities. The prices of these goods can be volatile on world markets. When prices fall, an economy will see a sharp reduction in export incomes, an adverse movement in their terms of trade, risks of a higher trade deficit and a danger that a nation will not be able to finance investment in education, healthcare and core infrastructure.
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Exports of least-developed countries by major product, 2010 |
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(Percentage) |
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2005 |
2010 |
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Others |
14.6 |
19.4 |
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Textiles |
1.4 |
1.3 |
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Other semi-manufactures |
3.2 |
2.3 |
|
Raw materials |
4.3 |
3.5 |
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Food |
9.2 |
9.9 |
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Clothing |
13.7 |
11.8 |
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Fuels |
53.6 |
51.7 |
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Source: World Trade Organisation |
Here are some examples of export dependence for a selection of countries in Sub-Saharan Africa: The data shows the % of total exports in 2010:
- Angola: 97% oil
- Ghana: 39% gold, 26% oil, 17% cocoa
- Kenya: 19% tea, 12% horticulture
- Nigeria: 90% oil
- Senegal: 11% fish, 11% phosphate
- Tanzania: 37% gold
- Uganda: 18% coffee
- Zambia: 84% copper
Sub-Saharan Africa (SSA) is often cited as a region where primary sector dependence is very high. SSA’s share in global manufacturing trade remains extremely low.
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.