By John Ravenhill (eds.)
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Extra resources for Africa in Economic Crisis
10 (April 1982) no. 4, p. 266. 24. Tanzania provides an excellent example. Ellis notes that the National Milling Corporation, the parastatal responsible for marketing most 38 25. 26. 27. 28. 29. 30. 31. 32. 8 billion. Shs 5 billion, nearly three times the total producer value of all official crop purchases in 1979/80, and equivalent to 15 per cent of Tanzania's GDP in 1979 (ibid. p. 277). See also Eicher, Chapter 7 of this volume. According to the World Bank (Accelerated Development, p. 59, n. b.
Neither is one necessarily more efficient than the other. On a priori grounds, arguments have been put forward that the necessity of meeting competition on world markets would bring gains in terms of Xefficiency; in reality, thi s is not assured in situations where domestic firms receive heavy state subsidies for their exports. As Little et 01. " Nor is it the case that firms intending to produce for export will necess arily capitalise on the country's scarce factor of production (assumed to be labour) when market prices are distorted by such policies as comparatively low tariffs on capital goods imports, etc.
Langdon, rather surprisingly, does not discuss another serious barrier to exports: persistently over-valued exchange rates. While export subsidies can in principle compensate exporters for some of the negative effects of domestic protection (assuming that the schemes are efficiently administered which, as Langdon shows, has not been the case in Kenya), the extent of currency over-valuations in many African countries in recent years would have made effective compensation prohibitively costly. " Again, the effect of overvalued exchange rates in 'indirectly' taxing traditional exporting sectors makes them a rational policy instrument for governments at certain stages of industrialisation.
Africa in Economic Crisis by John Ravenhill (eds.)