AGRICULTURAL DIVERSIFICATION AND EXPORT PROMOTION IN SUB-SAHARAN AFRICA

Declines in world commodity prices have emphasized the need in Africa for diversification away from a few agricultural exports. Market reforms are not enough. High transfer costs and imperfect factor markets imply that many consumer goods, frequently including food staples, are non-tradables, raising the possibility of major demand constraints in agriculture. Commodity-specific, zone-specific, and sequenced production and marketing policies are necessary to speed supply response of agricultural exports to market reforms. Then, supply-responsiveness must be increased for non-tradable wage goods, especially in non-export-producing zones, to cope with new domestic demand created by export growth.