Market Opportunities for African Agriculture - International Food ...

espectively) declined sharply in the later half of the 1990s. This sharp decline in SSA
exports is due in part by slow growth in global demand for the type of goods SSA
countries produced (Ng and Yeats, 2000).
A recent study on Economic Development in Africa by the United Nations
Conference on Trade and Development (2001) argues that a secular decline in African
terms of trade since the early 1980s is responsible for the marginalization of the region in
world trade. According to the estimates of the UNCTAD study, the level of overall terms
of trade at the end of 1990s was 21 percent below that attained in the early 1970s for
SSA. The decline in the share of SSA in world exports in the past two decades can be
explained by the declines in prices of its exports relative to those of the rest of the world.
In particular, a major factor behind the downward trend in the terms of trade of SSA is
the decline of prices of primary commodities relative to manufactures. Moreover, this
downward trend in relative prices of primary commodities vis-à-vis manufactures is
accompanied by a high degree of volatility. An IMF/World Bank study (2001) shows that
SSA exports experienced approximately twice the volatility in terms of trade as East
Asia’s in the 1970s, 1980s, and 1990s, and roughly four times the volatility experienced
by the industrial countries during the same period.
6