For most African countries, merchandise exports are the main source of foreign exchange earnings. Since the 1980s, Africa’s share of world trade has remained roughly the same, with some fluctuations in the neighborhood of three percent for both imports and exports. This is lower than during the colonial period.
In other words, the continent played a much larger role in world trade in colonial times than it does now. In the late 1980s – early 1990s, there was a catastrophic collapse of prices in most commodity markets due to oversupply (which, by the way, affected our country as well). It sharply reduced in value (but not in physical volume) Africa’s share of world commodity exports and imports.
The decline in Africa’s share of world trade was only halted by the beginning of the 21st century. Since then, it has been growing slowly but steadily. In 2012, according to UNCTAD, the value of total merchandise exports from the continent’s 54 countries amounted to $626.249 million, or almost 3.42% of the world total, while merchandise imports were $604.098 million (3.27%).
The overall picture of the dynamics of African exports and imports and the trade balance for the continent as a whole and for Sub-Saharan Africa (SSA) for the entire post-colonial period provides.
First, since independence the value of exports and imports has risen by about 90 to 100 times in current prices both for the continent as a whole and for so-called Black Africa. However, given the decline in the real purchasing power of the U.S. dollar over the period in question by about 9.5 times,11 the real growth was only about 9-10.5 times.
Second, it is also not uninteresting that the only time when trade deficits occurred both in SSA and on the continent as a whole was in the decade 1950-59. At that time almost all the countries of the continent were colonially dependent on European metropolises that could force Africans to export and import goods at prices and conditions dictated by their European capitals by extra-economic means.
Finally, thirdly, it is noteworthy that the poorer SSA countries have maintained a persistent trade surplus throughout the period of their independent development. At the same time, the continent as a whole, mainly due to the sharp decline in oil revenues of North African countries in the 1980s and 1990s, had a negative balance.
Since the late 1990s, the world situation has slowly begun to improve. The demand for African raw materials is also growing. Export earnings are on the rise, allowing many countries of the continent to launch new development projects. The period immediately preceding the crisis, from early 2004 to late 2008, has been especially favorable.
It is clear that among African countries there were those that benefited greatly from rising energy, mineral and food prices, but there were also those (mainly the poorest net importers of these commodities) whose position was worsened by such price dynamics. However, even for the latter, the macroeconomic situation was not hopeless. It was during this period that the G-8 countries decided to provide substantial assistance to the countries of the continent as part of a special initiative. A number of the poorest countries had many millions of dollars in foreign debt forgiven, which significantly improved their macroeconomic indicators.
After contracting significantly during 2009 due to the global financial and economic crisis, African exports rebounded quickly, posting a 25 percent jump in 2010 (compared to the global average of 21 percent). Import growth was also significant, although somewhat more modest at 15.6%. In subsequent years, the rate of growth began to slow down, although it remained quite high. In 2012, African exports grew by 4.7% for the continent as a whole, and imports by 7.5%. Exports from SSA countries fell by 2.5%, while imports rose by 4.3%. The trade surplus was maintained in 2012. However, these figures indicate unfavorable trends in foreign trade of different strengths.
Since most African exports tend to be low value-added, Africa’s export earnings are highly dependent on price fluctuations in commodity markets, making the continent more susceptible to external shocks. On the other hand, the relative lack of involvement of African economies in globalization processes and their weak integration in global production chains work in the opposite direction, making the continent’s economies, other things being equal, less dependent on the volatility of world markets.