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What Lessons Emerge from Africa’s Experience in Exploiting
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Morley, David - The Cambridge introduction to creative writing (2011) - libgen.li
| What Lessons Emerge from Africa’s Experience in Exploiting Opportunities for Network Trade? Several factors appear to be critical in fostering successful engagement in network trade by African producers, as illustrated by the following examples. Exploiting price sensitivity is one. Pineapples sold in Europe have become a major export for Ghana in the last few years. Ghana’s pineapples are of a lower quality than those of its main competitors in the European market, Costa Rica and Côte d’Ivoire, but even so, Ghana’s prices were relatively high due to an inefficient national transport system. Largely as a result of the country’s enhanced sea-freighting capacity in the mid-1990s, Ghana’s pineapple shipping costs to Europe were reduced significantly compared to former airfreight means. This in turn allowed Ghana’s pineapple exporters to reduce the export price and compete more effectively in Europe. While this has been a sound market-entry strategy, Ghana faces a significant risk in this low-price and low-margin market unless it can ramp up quality as well as increase scale. 57 Speed-to-market, a second factor, has been crucial in the success of highly perishable commodities, such as Kenyan cut flowers, as discussed above. The fact that there are several planes leaving Nairobi everyday for its main markets in the EU makes for fast delivery—an obvious competitive advantage. Kenya was one of the first African countries to privatize its airline industry in 1996. This infrastructure asset also allows African pro- 06-Chap6:06-Chap6 10/9/06 2:39 PM Page 348 INVESTMENT - TRADE LINKAGES IN AFRICAN - ASIAN COMMERCE 349 ducers tapping into distant export markets to be highly responsive and flexible to market changes. Recently, an Air Services Agreement between China and Kenya was signed Kenya Airways has been granted landing rights in several cities in China and is now operating direct flights to Hong Kong (China) and Guangzhou in southern China from Nairobi. Since Kenya was granted Preferred Tourist Destination Status in 2004, arrivals from China have more than doubled and are expected to grow even more. Similar to the policies with China, Kenya could seek enhanced access to other Asian markets, such as India, Japan, and Korea. High labor productivity is clearly a critical factor. It explains in part why, as discussed above, South Africa is essentially the only country in Sub- Saharan Africa to participate in producer-driven network trade. At the same time, low labor productivity is a major weakness for the Kenyan apparel industry even though Kenyan wages are lower than those in Honduras, for example, the labor cost for producing one t-shirt in Kenya is 1.6 times that of Honduras. In addition to shop-floor productivity-enhancement programs, implementation of specific policies to improve labor productivity is required in education, skills training, and health policies. Finally, the importance of product quality cannot be overstated. Nigeria s shrimp industry has been transformed and is now increasingly prof- itabe thanks to the high quality of its exports to a growing European market. However, if Ghana wants to increase the profitability of its pineapple industry, it will have to start focusing on ways to produce higher- quality produce through the implementation of standards and quality certification. 58 To be sure, as the foregoing analysis makes clear, these attributes are not easy to develop. They are complex to implement, require significant investment in resources, and they take time. The experience of many of the developing countries in the world that have been successful in entering network trade—even more so those that were not successful—testifies to this. The barriers to entry to global production sharing should not be underestimated. Download 5.17 Mb. Share with your friends:
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