Exchange-Rate Management and Manufactured Exports in Sub-Saharan Africa

Abstract

This paper presents an overview of the evolution of exchange-rate regimes in Africa and then attempts to assess empirically the impact of exchange-rate policy on manufactured export performance on a panel of major Sub-Saharan Africa countries over the 1970-92 period. We examine the impact of three exchange-rate policy indicators: real effective exchangerate changes, real exchange-rate volatility, and (model-based measures of) real exchange-rate misalignment. Export supply functions are estimated for three manufacturing industries (textile, chemicals, and metals) and two exchange-rate regimes: a fixed rates regime including six CFA Franc countries, and a more flexible regime represented by five non-CFA countries. Our findings show that exchange-rate management matters for export performance. This is evidenced both by the significant impact of changes in the real effective exchange rate and by the negative influence exerted independently by real exchange-rate misalignment. On the ... L’evolution des regimes de change en Afrique entre 1970 et 1992 est examinee dans ce document. Les effets de la politique de change sur les exportations de produits manufactures de l’Afrique sub-saharienne sont egalement examines de maniere empirique. Trois indicateurs de la politique de change sont plus particulierement etudies: les variations du taux de change reel effectif, la volatilite du taux de change reel et son defaut d’alignement (mesure a partir d’un modele). Des fonctions d’exportation ont ete estimees pour trois branches de l’industrie manufacturiere (textile, chimie, metallurgie), ainsi que deux regimes de change: un regime de taux de change fixes, represente par six pays de la zone CFA, et un second, plus flexible, represente par cinq pays n’appartenant pas a cette zone. Il en ressort que la politique de change influe largement sur les performances a l’exportation du fait des consequences importantes des variations du taux de change reel effectif et de l’incidence ...

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