Trade reform in ten sub-Saharan
            African countries : achievements and failures
One cause of the disappointing
            performance of the tradable goods sector in sub-Saharan
            Africa after several years of adjustment and investment of
            considerable resources is the less-than-exemplary
            implementation of reform, concludes the author. The author
            summarizes the experience of ten sub-Saharan countries with
            trade reform. Trade reform is broadly defined to encompass
            reform of foreign exchange and other measures (such as
            domestic price decontrol) that directly or indirectly affect
            the relative profitability of the tradable goods sector. She
            singles out several factors that explain the different
            implementation records of the countries sampled and
            evaluates the likelihood that reform will be sustained in
            the future. Of the ten countries examined, only a few
            (Ghana, Tanzania, Uganda, and, to a lesser extent, Mali)
            began and sustained trade reform in the 1980s and 1990s. In
            other countries, most liberalization measures adopted were
            later reversed or suspended because of a balance of payments
            crisis or social unrest or both. Compatible macroeconomic
            and exchange rate policies are ranked as most crucial for
            successful trade reform. Incompatible macroeconomic
            policies, for instance, brought about the reversal of trade
            liberalization in Kenya and of foreign exchange market
            liberalization in Nigeria. Experience in the three franc
            zone countries, especially Cote d'Ivoire and Senegal,
            highlights the enormous difficulty of achieving a consistent
            real exchange rate under the constraint of a fixed nominal
            exchange rate. In theory, under certain conditions a
            devaluation's impact on relative prices can be mimicked
            through equivalent tax-plus-subsidy schemes, but experience
            in these countries shows how administrative difficulties and
            price rigidity make it almost impossible to achieve this
            goal in practice. Experience in all countries also
            highlights that early attention to institutional reform,
            consensus building, and domestic market reform is
            indispensable for lasting trade reform. Even among the few
            countries where trade reform has been sustained, none can
            yet boast of the same low levels of protection as now
            prevail in reforming countries elsewhere in the world.
            Sub-Saharan African countries' very distorted trade
            regimes, their weak administrative capacity, and their low
            levels of income all contribute to the relatively slow pace
            of trade liberalization in these countries. The author
            identifies three indicators of the sustainability of reform:
            the change in level and composition of government revenues
            and expenditures; the rate of growth of, and the
            diversification of, exports; and the level of investment,
            especially private investment in productive activities. On
            the basis of these indicators, experience in the sampled
            countries is not promising. Few of them have radically
            changed the structural parameters of their economies. In
            most countries, government revenues are still heavily
            dependent on trade taxes; budget deficits have been
            contained, if at all, chiefly by curtailing government
            spending in priority areas; and little export
            diversification has taken place.