Africa Foreign Investor Survey 2005 - unido

Figure 7.2 Past and future export growth rates for main investor categories
Future expected annual export growth
over the next three yerars
80%
70%
60%
50%
40%
30%
20%
10%
1981-1990
FE
Primary
Secondary
North
JV
Regional
1980 and before
2001 and after
L-TNC
Global
WOE
Tertiary
1991-2000
S-TNC
South
0%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Note: The bubble size indicates the current export volume of the respective group.
Values were taken from the separated observations of past and future export growth.
Past annual export growth
over the last three years
At a subsector level, export growth looks promising in
food, garments and auto components and machinery
(annex table 7.4). In the food and drink sector, while
there is a growth in the average figures for export, the
total export figure in dollar value is negative due to dramatic
export declines of $180 million annually observed
for seven companies in Côte d’Ivoire. In terms of country
exporting performance, it is clear that without Côte
d’Ivoire the total sample’s export volume would not have
declined at $96m but increased at $100m (annex table
7.5). However, Côte d‘Ivoire is predicted to achieve a significant
turnaround from a decline in exports over the
last three years to a strong recovery over the next three
years. In most of the other countries the expected future
export volume growth exceeds the past volume growth.
Kenya and Madagascar are expecting a net growth of
greater than $60 million in manufactured exports in each
of the next three years.
Regional exporters
Of the 338 exporters in the sample (of which 322
answered the question on what percentage of sales are
exports), 171 were classified as regional market seekers
because more than half of their exports go to other SSA
countries. Around $850 million, or 31 per cent of the
sample total export volume of $2.8 billion are regional
exports. Tables 7.5–7.6 present the breakdown of
regional exporters by host country and subsector. Of the
171 companies, only 124 declared the actual value of
their exports.
The top ten regional exporters account for nearly 60
per cent of total SSA export volume. All ten originate
from the North and were established before 1981. Five
are located in Côte d’Ivoire. More than 40 per cent of
regional exports originate from investors in Côte d’Ivoire
and are valued at $300 million. The largest number of
foreign investors located in any one country exporting to
SSA is in Kenya.
Table 7.7 gives the top three destinations of regional
exporters for each host country.This ranking is based on
a score derived from investors’ rankings of export destinations.
Regional investors generally export a smaller
percentage of their output than global exporters do, on
average, no more than a third compared to 80 per cent
by the latter. Regional market seekers are in essence following
the classic learning-curve export marketing
growth path, building out from an established local market
position to systematically develop neighbouring markets.
All without exception market primarily to neighbours.
None of the firms surveyed, for example, in East
Africa considered any West African country to be a topthree
export destination or vice versa.
Although the regional market seekers still sell the bulk
of their output in the host economy, they show significant
differences to pure local market-seeking firms. As
observed in previous chapters, regional market seekers
are usually larger than local market seekers. For example,
their average sales are higher – $18.5 million compared
to $12.6 million (see figure 4.25 and figure 4.27). Also,
in terms of employment, regional market seekers employ
on average 70 more people than the average local market
seeking firm. Size differences between local and regional
market seekers are higher for firms from the North than
for Southern firms. Northern regional market seekers
have on average sales almost double that of Northern
local market seekers and four times that of Southern
regional market seekers (see figure 4.30).
A third of regional exporters are more than 25 years
old, compared to only 23 per cent of local market seekers
(figure 4.64).There is some evidence that these wellestablished
regional exporters are experiencing market
saturation. For example, the volume of their exports
has decreased over the last three years.They export on
average a smaller percentage of sales than the whole
106 Africa Foreign Investor Survey 2005