ABSTRACT
The Kravis (1970) hypothesis asserting that international trade provides an avenue for sustained growth has found much support in a large number of studies. Hence, attention has focused on identifying factors that can hinder a country from fully utilizing its capacity in international trade. While many developing countries have used international trade to further their economic growth, sub-Saharan countries have shown little progress in their effort to penetrate the world markets. In fact, sub-Saharan Africa accounted for only 3.1% of global exports in mid 1950s, whereas this share has plunged to only 1.2% by 1990, a reduction of approximately $65 billion in annual export. We have already summarized the evidence in the opening chapter of this book suggesting that this loss of trade can be primarily attributed to the loss of the international market for traditional exports. However, the critical point remains that this loss was not compensated for by the substitution of non-traditional exports, including labor intensive manufactured exports.
