THE VARIOUS DIMENSIONS OF COMMODITY DEPENDENCE IN AFRICA

• Published in: The South African Journal of economics Vol. 73; no. 2; pp. 269 - 291
• Main Authors: MARINKOV, MARINA, BURGER, PHILIPPE
• Format: Journal Article
• Language: English
• Published: Oxford, UK Blackwell Publishing Ltd 01.06.2005; Economic Society of South Africa; Wiley Subscription Services, Inc
• Series: South African Journal of Economics
• Subjects: Africa; Commodities; Developing countries; Economic conditions; Economic development; Economic performance; Empirical research; Exports; Foreign exchange rates; Foreign trade; GDP; Gross Domestic Product; International economic relations; Manycountries; Prices; Studies; Trade policy; Volatility; Africa
• ISSN: 0038-2280; 1813-6982
• DOI: 10.1111/j.1813-6982.2005.00017.x

This paper considers whether or not the poor performance of many African countries can be ascribed to a dependency on primary commodity exports. This is a multidimensional question which concerns the Prebisch‐Singer Hypothesis, commodity price volatility, the dependence of GDP on exports and the commodity price elasticity of exchange rates (the so‐called Dutch disease problem). To consider these questions, the paper uses data on 39 commodities and ten African countries. It finds that relative to the price of manufactured goods there is a downward secular trend in less than half of the commodity prices considered. Nonetheless, most commodity prices are highly volatile. Furthermore, in the case of half of the countries considered GDP is dependent on exports. However, the paper finds limited evidence for Dutch disease.