“
BEHIND
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THE
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BORDER
” CONSTRAINTS ON AFRICAN
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ASIAN
TRADE AND INVESTMENT FLOWS201
the private sector in Africa, sales and purchase relations with governments remain a significant part of many firms business transactions.
Based
on the WBAATI survey, the construction sector has the largest share of sales to governments (figure 4.11). This is consistent with findings in the other regions of the world. Larger firms generally rely more on government sales and purchases. With the exception of the agriculture sector,
the survey data show that transactions with governments are more intensive on the sales side than on the
purchase side across the board, regardless of sector and size.
Dependence on government sales and purchases appears to make firms in Africa less competitive. The sectors that have higher shares of sales to governments in their total sales revenues tend to have fewer competitors in their national markets (figure 4.12). Also, the degree of intensity in sales to or purchase from government is associated with the degree of concentration in firms buyer or supplier relations (figure Minimizing the anticompetitive nature of transactions with government is important for fostering overall domestic competition in Africa.
Adherence to World Trade Organization (WTO)–based rules regarding government procurement that provide for open competition,
transparentFIGURE 4.11
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