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OECD Trade Policy Papers

This series is designed to make available to a wider readership selected trade policy studies prepared for use within the OECD.

NB. No. 1 to No. 139 were released under the previous series title OECD Trade Policy Working Papers.

English

Export controls and competitiveness in African mining and minerals processing industries

Governments may decide to control the export of unprocessed raw materials hoping that this will promote local downstream industries. There is scant empirical examination of the actual outcomes of such policies put in place. This paper describes use of export control measures by four minerals-rich African countries and looks for effects on activities downstream from the extractive sector that may be attributed to these measures. The measures studied are export taxes, non-automatic export licensing requirements and outright export bans. The industries are manganese in Gabon, lead in South Africa, copper in Zambia and chromite in Zimbabwe.

For the empirical analysis the Revealed Comparative Advantage (RCA) index is calculated tracking over 20 years the relative global performance of the local mining and processing industries, for the specific minerals studied. The effect of the restrictive measures is investigated by way of identifying structural breaks in the level of the RCA index, for both the raw mineral and related processed products.

The results suggest that use of export restrictions as a tool for stimulating local mineral processing does not pay off. There was no improvement in the revealed comparative advantage of processed products presumed to benefit from export controls on the raw material. Moreover, the measures may have undermined the overall performance of the industries in some of the cases studied because the relative export performance of the mined minerals deteriorated.

 

English

Keywords: structural break, Africa, revealed comparative advantage, export tax, value chain of mining
JEL: L7: Industrial Organization / Industry Studies: Primary Products and Construction; F1: International Economics / Trade; O1: Economic Development, Innovation, Technological Change, and Growth / Economic Development; F2: International Economics / International Factor Movements and International Business
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