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Submitted by Steve Golub on

Dear Seyni

Thanks for taking the time to read the blog and your thoughtful comments.

Africa has areas of comparative advantage where it can compete very successfully. At present this is largely confined to capital-intensive minerals and fuels but there has been some some progress in labor-intensive export industries such as horticulture, fishing, tourism and even manufacturing. Some traditional primary products such as coffee, cocoa, and groundnuts can be very lucrative for farmers if quality is upgraded. In all these cases, however, weak institutions and poor governance impede competitiveness. Consider the groundnut industry in Senegal. As my co-author Prof. Aly Mbaye has shown, Senegal could benefit from producing and exporting high quality edible groundnuts but Senegal has been unable to upgrade the quality of its groundnuts due to lack of investment in infrastructure and training of producers. As a result, Senegalese groundnuts are contaminated by high levels of aflotoxin, a cancer-causing substance that occurs when groundnuts are not properly handled. Controlling aflotoxins is not a difficult technological problem but requires an organized effort to educate farmers and improve storage and transport infrastructure. The government and private sector must work together to overcome these kinds of obstacles to competitiveness.

Protection of domestic industry can be helpful in some circumstances, if kept at reasonable levels and on temporary basis. High levels of protection foster inefficiency and smuggling. Elevated protection in Senegal for industries such as sugar and textiles failed to create a viable industrial base and led to large-scale smuggling from The Gambia, as Prof. Mbaye and I have also shown.

The African tunas are quite capable of holding their own in the world economy if governments create a favorable environment for domestic and foreign firms to invest.