Demand-side constraints and structural adjustment in sub-Saharan African countries

However, in sub-Saharan Africa, where production is highly concentrated on a few export commodities, this could have the effect of decreasing world prices if most countries promoted and expanded their exports at the same time. Furthermore, the political implications of an economic adjustment, especially in food security, may be so negative that a risk-averse government will not pursue such a policy. This study estimates the effects of a structural adjustment pursued collectively by African countries. The report presents a brief overview of the external position of sub-Saharan African countries, highlights specific structural adjustment policies, examines the supply and demand constraints on structural adjustment, and analyzes the region"s export performance. The report then estimates the potential effects of the region"s export growth on world market prices, foreign export earnings, and changes in production; these estimates permit identification of the products for which export promotion may produce significantly negative terms of trade and thus highlight the discrepancy between world market prices and marginal export revenue. The potential for an increase in trade within sub- Saharan Africa is also briefly discussed. The report concludes with a discussion of structural adjustment and the outlook for agricultural export earnings in Africa.