African exporters suffer from low survival rates on international
markets. They fail more often than others, incurring time and again the
setup costs involved in starting new relationships. This high churning
is a source of waste, uncertainty, and discouragement.
However, this trend is not inevitable. The high 'infant
mortality' of African exports is largely explained by Africa's
low-income business environment and, once properly benchmarked,
Africa’s performance in terms of exporter failure is no outlier.
Moreover, African exporters show vigorous entrepreneurship, with high
entry rates into new products and markets despite formidable hurdles
created by poor infrastructure, landlocked boundaries for some, and
limited access to major sea routes for others. African exporters
experiment a lot, and they frequently pay the price of failure. What
matters for policy is how to ensure that viable ventures survive.
Research carried out for this book demonstrates that governments can
and should help to reduce the rate of failure of African export
ventures through a mixture of improvements in the business environment,
as well as well-targeted proactive interventions.
The business environment can be made more conducive to sustainable
export entrepreneurship through traditional policy prescriptions such
as reducing transportation costs, facilitating trade through better
technology and workflow in border management, improving the
effectiveness of banking regulations to ensure the availability of
trade finance, and striving for regulatory simplicity and
coherence.
In addition, governments can help leverage synergies between
exporters. Original research featured in this book shows that African
exporters improve each other's chances of survival when a critical
mass of them penetrates a given market together. They also benefit from
diaspora presence in destination markets. With adequate donor support
and private-sector engagement, export-promotion agencies and
technical-assistance programs can help leverage those synergies.
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