Export Opportunity Scan p pp y for ECOWAS countries Michael Freudenberg Michael Freudenberg Market Analysis Section, ITC
Introduction The problem: – Exports of many ECOWAS countries are concentrated Exports of many ECOWAS countries are concentrated on few products and markets (cost, quantity, quality, time, …) – Diversifying the economy and broadening the export base towards high-growth sectors is key for future growth. – Governments often need to complement general (“horizontal”) policies that improve the overall business environment general ( horizontal ) policies that improve the overall business environment by more targeted, sector-specific policies. ITC’s contribution: – Export Opportunity Scan to assist in the selection of priority sectors – Key questions: – Key questions: • What are promising industries or products? • What are attractive markets?
Many ECOWAS countries are concentrated on only few products and markets on only few products and markets Product concentration: Share of the top three exported products (%), 2005 0 High product diversification 10 10 Low market diversification 20 High product and market diversification 30 30 Senegal 40 Togo Côte d'Ivoire Low product and p 50 50 market diversification Ghana 60 Gambia Benin Cape Verde Niger 70 70 Sierra Leone Sierra Leone Guinea Liberia Burkina Faso 80 Mali 90 90 Low product diversification Low product diversification Guinea-Bissau Nigeria High market diversification 100 100 90 80 70 60 50 40 30 20 10 0 M Market concentration: Share of the top three export markets (%), 2005 k t t ti Sh f th t th t k t (%) 2005 Source:Trade Map. The size of the bubbles correspond to the countries' exports in 2005, ranging from USD 5 million (Gambia) to 47 billion (Nigeria).
Important industries for the ECOWAS region and individual countries for the ECOWAS region and individual countries Industry ECOWAS Number Countries where the industry represents (Rank of exports of more than 10% (50%) of exports exporters export value) ) ( S (USD million) ) (% (% of country’s exports) f ’ ) 1. Fuel Nigeria (97), Cape Verde (48), Côte d'Ivoire (28), Senegal (21) 47,206 11 2. Cocoa 3,609 9 Ghana (49), Togo (38), Côte d'Ivoire (29) 3. Ships Liberia (85) 1,697 7 4. Ores Guinea (59), Niger (44) 1,159 6 5. Cotton Mali (83), Burkina Faso (81), Benin (59) 881 11 6. Vehicles 742 10 --- 7. Wood 691 11 Ghana (13) 8. Fruit and nuts Guinea-Bissau (92) ( ) 519 9 9. Rubber 452 8 Liberia (11) 10. Seafood 423 13 Gambia (16), Senegal (16), Cape Verde (13) 11 Inorg chemicals 11. Inorg. chemicals 407 407 3 3 Guinea (17) Senegal (13) Guinea (17), Senegal (13) 12. Precious stones Sierra Leone (62), Niger (21) 361 10 28. Vegetables 74 7 Gambia (10) 43 B 43. Beverages 24 24 7 7 Gambia (42) G bi (42) 51. Railway 15 2 Cape Verde (15) Source: TradeMap. Data refer to 2005.
How to select sectors t t ? l t H
Selection of sectors All sectors (HS2) Priority sectors Export Potential Asessment Animals (01) ( ) 1. Fuel Export Opportunity Scan Meat (02) 2. Ores Seafood (03) 3. Ships Export performance p p Dairy prod. (04) 4. Cocoa World markets Prod. of animal origin (05) 5. Cotton Live plants (06) 5. Iron and steel Domestic supply conditions Vegetables (07) 7. Fruits and nuts Fruit and nuts (08) Fruit and nuts (08) 8. Precious stones 8 Precious stones Socio-economic impact S Coffee, tea and spices 9. Machinery (09) 10. Rubber 10. Rubber (...) (…)
How to identify promising sectors in a region? y p g g Promising industries Promising industries Current Export Performance World Market Dynamism Trade Balance Size Dynamism Size Exporter Diversification World World Export Export Nb. of Net exports imports import value growth significant growth exporters Relative World Absolute trade Absolute market change Share of balance change g share share top exporter top exporter in region
Utilization of composite indices Utilization of composite indices to combine indicators with different units • Standardised 100 Upper threshold to range between to range between 0 (low) and 100 (high) • Averaged to obtain an overall index L Lower threshold th h ld 0 0
ECOWAS Export performance f t ECOWAS E • 4. Diversification • 3. Trade balance • 2. Dynamism • 1. Size
ECOWAS Export performance: 1 Size 1. Size 1a. ECOWAS exports 1b. Share of ECOWAS 1. Size to world in world exports Industry USD million Index % Index Index Cotton 881 100 2.7 100 100 Cocoa Cocoa 3 609 3,609 100 100 16 9 16.9 100 100 100 100 Fuel 47,206 100 3.6 100 100 Ores 1,159 100 2.0 100 100 Ships 1,697 100 2.4 100 100 Fruit and nuts 519 59 1.6 80 70 Wood Wood 691 691 78 78 0.7 0.7 36 36 57 57 Salt and cement 293 33 1.4 68 51 Inorganic chemicals 407 46 1.1 55 51 Seafood Seafood 423 423 48 48 0 9 0.9 42 42 45 45 (…) Photographic goods 72 0 0.0 0 0 Wool, animal hair 64 0 0.0 0 0
ECOWAS Export performance: 2 Dynamism 2. Dynamism Growth 2a. Absolute change in 2b. Growth of ECOWAS of world 2. Dynamism ECOWAS exports exports to world imports p Industry Industry USD Index % p.a. Index % p.a. Index million Ships 909 100 32 66 35 83 Fuel 26,517 100 26 55 33 78 Fruit and nuts 341 98 19 42 14 70 Rubber Rubber 270 270 78 78 28 28 59 59 16 16 69 69 Cocoa 1,877 100 17 39 17 69 Cotton 348 100 15 35 7 68 Ores 475 100 14 33 29 67 Machinery 99 30 58 100 12 65 Vehicles Vehicles 93 93 28 28 74 74 100 100 13 13 64 64 Inorganic chemicals 246 71 27 57 18 64 (…) Furniture -17,686 0 -17 0 14 0 Aluminium -75,264 0 -25 0 14 0
ECOWAS Export performance: 3. Trade balance 3 Trade balance Industry 3a. Trade balance 3b. Relative trade balance 3. Trade balance USD million USD million Index Index % of trade % of trade Index Index Index Index Cocoa 3,596 100 99.5 100 100 Ores 1,156 100 99.6 100 100 Fruit and nuts 484 99 91.0 96 97 Fuel 40,863 100 86.6 93 97 Wood 598 100 85.6 93 96 Leather 199 88 98.2 99 94 Precious stones 324 93 82.5 91 92 Nickel 0 81 100.0 100 91 Furskins 0 81 100.0 100 91 Pulp of wood 1 81 88.7 94 88 (…) ( ) Machinery -3,518 0 -92.2 4 2 Elect. Equipment -3,152 0 -93.6 3 1 Cereals Cereals -2,244 2 244 0 0 -95.7 95 7 2 2 0 0
ECOWAS Export performance: 4 Diversification 4. Diversification 4b. Share of top exporter in 4. Diversi- 4a. Significant exporters ECOWAS exports fication Industry y Number (0 to 15) Index % Index Index Cotton 11 100 27 99 100 Iron and steel 13 100 22 100 100 Machinery 13 100 27 99 100 Precious stones 10 91 38 82 86 Apparatus Apparatus 8 8 73 73 26 26 100 100 86 86 Wood 11 100 49 65 83 Electronic 11 100 50 64 82 equipment equipment Oil seed 9 82 43 75 79 Seafood 13 100 54 57 79 Copper Copper 8 8 73 73 40 40 79 79 76 76 (…) Umbrellas 0 0 91 0 0 Furskins 0 0 100 0 0
ECOWAS Export performance: Overall ranking of industries O ll ki f i d i Industry label Size Dynamism Diversification Trade Export index for (Rank) (Rank) (Rank) (Rank) (Rank) (Rank) balance balance ECOWAS ECOWAS (Rank) 1. Cotton 1 6 1 13 88 2 Cocoa 2. Cocoa 1 1 4 4 21 21 1 1 84 84 3. Fuel 1 2 38 3 84 4. Ores 1 7 42 1 79 5. Fruit and nuts 6 3 13 3 77 6. Wood 7 72 6 5 64 7. Rubber 14 4 15 23 62 8. Inorganic chemicals 8 9 51 16 60 9. Ships 1 1 55 88 59 10. Precious stones 16 60 4 7 57 (…) 90. Umbrellas 62 37 91 55 22 91. Impregnated textile fabric p g 62 51 89 39 20 92. Misc. Manufact. Pr. 62 85 82 55 15
ECOWAS Export performance: Overall ranking of products O ll ki f d Product (HS 6 code) ECOWAS Export Index C Cashew nuts, in shell, fresh or dried (080131) h t i h ll f h d i d (080131) 100 100 Cotton seeds, whether or not broken (120720) 96 Cotton, not carded or combed (520100) 95 Oil seeds and oleaginous fruits, nes, whether or not broken (120799) 94 Technically specified natural rubber (TSNR) (400122) 94 Guavas, mangoes and mangosteens, fresh or dried (080450) 94 Natural rubber in other forms nes (400129) 93 Cocoa beans, whole or broken, raw or roasted (180100) 93 Waste and scrap, of tinned iron or steel (720430) p ( ) 92 Cuttle fish and squid,shelled or not,frozen,dried,salted or in brine (030749) 92 Octopus, frozen, dried, salted or in brine (030759) 91 Aircraft engines spark-ignition reciprocating or rotary type (840710) Aircraft engines, spark ignition reciprocating or rotary type (840710) 91 91 Cocoa butter, fat and oil (180400) 91 Veneer, tropical woods nes, <6mm thick (440839) 91 Lumber non coniferous nes (440799) Lumber, non-coniferous nes (440799) 91 91
World markets World markets (for the same industries: includes only products that are exported) • 1. Size • 2. Dynamism • 3. Market access conditions
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