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close this bookExporting Africa: Technology, Trade and Industrialization in Sub-Saharan Africa (UNU, 1995, 434 pages)
close this folderPart I. Exporting Africa: an analysis
close this folder6. Conclusions and policy implications
View the documentBuilding core capabilities: towards competitiveness
View the documentEconomic reforms and industrialization
View the documentExport orientation or import substitution?
View the documentLocal or foreign investment?
View the documentRegional cooperation and trade agreements
View the documentNotes to part I

Economic reforms and industrialization

The poor record of many developing countries can be explained by their inability to create internationally competitive industry. One criticism of the structural adjustment programmes which many of the countries in Sub-Saharan Africa adopted during the 1980s has been their over-emphasis on 'getting prices right' to the neglect of other things that governments ought to be doing. The nature of the problems that exporting firms face in their struggle to remain competitive in world markets suggests that, although exchange rate action and import liberalization and incentives for improving tradables can help, it is difficult to sustain an export recovery without additional steps being taken to assist firms in the export sector to improve their international competitiveness. Some firms have found it difficult to maintain their position in export markets because of a lack of complementary supportive investments by government. In fact, references often made to the deindustrialization consequences of economic reforms in Africa could be a reflection of this lack of complementary supportive intervention by governments. As the Chinese example has shown, the withdrawal of the state, combined with active intervention in infrastructural support, can lead to a booming non-state sector (Qian and Xu, 1993).1

The findings of this study suggest that economic reform policies can enhance the industrialization process and restructuring of the export sector in Africa, provided that these policies incorporate a considerable element of government support, in particular complementary investments to assist firms to build the technological capabilities which are necessary for attaining and maintaining competitiveness.