Comparative advantages of sub-Saharan states

About the study

Many people and institutions have argued that some developing countries have an advantage in agricultural production, particularly of cash crops, because of good climate and relative cheapness of land. The argument is developed further: markets would function better if developing states specialise in agriculture, trading for other goods which aren't produced domestically in sufficient quantities.

On the other hand, certain countries export more labour intensive goods as their economies develop, despite the expectation of increased capital intensive goods production. Human resources growth outpaces capital growth. Many African countries have an abundance of the well-educated unemployed or underemployed. In the presence of various other factors affecting business (existing investment, government, law, environment, international inputs, scientific knowledge, fashion, to name a few), deciding which goods to produce is even more complicated.

My approach in this work is to consider the main factors affecting major industries in a country, and use them to assess the relative strengths of each state.

What the results show

For each country, the tables in the sections below show the relatively most attractive industry at the top of the list. Reading down the list, the industries become less appealing. To calculate relative attractiveness, I work out how absolutely strong a business sector is in the country, then compare it with the results for other countries. If the sector is above the country average across all industries, then I say it is relatively strong.

Traditional comparative advantage talks about goods that can be traded internationally. Some of the businesses considered in this study are not easily exchanged, so the meaning I use is a bit different. You can see a traditional analysis by looking just at the tradable goods in a country's list.

The lists are not definitive statements of how much potential an industry has. They use only a limited number of current resource inputs, and these may change in future, or others may become important. Also, any business may have an influential position in a small industry. Industries are not necessarily absolutely strong in the country just because they are relatively strong, although they usually are. The report does not consider capital availability for setting up businesses, and some sectors may require be too expensive at present, despite having a good economic profile.

A full description of the methodology used, the industries considered, and the inputs included is at the appendix to the report.

The results

Angola
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Central African Republic
Chad
Cote d'Ivoire
Congo
Democratic Republic of the Congo
Eritrea
Ethiopia
Ghana
Guinea
Kenya
Lesotho
Madagascar
Malawi
Mali
Mauritania
Mozambique
Namibia
Niger
Nigeria
Rwanda
Senegal
Sierra Leone
South Africa
Tanzania
Togo
Uganda
Zambia
Zimbabwe

Notes on abbreviations used

EBA means the Everything but Arms agreement between the European Union and certain least developed countries.
ECOWAS means the Economic Community of West African States.
EU means European Union.
GDP means Gross Domestic Product.
When sub-Saharan median is mentioned, then it means the median of the states included in this report.

Angola


Petroleum extraction 1
Petroleum refining 2
Shipbuilding 3
Iron and steel production 4
Mining 5
Aircraft manufacture / aerospace 6
Electricity supply, water supply, gas supply 7
General insurance 8
Publishing 8
Electronics 10
Plastics manufacture 11
Industrial chemicals 11
Car manufacture 13
Pharmaceuticals 14
Food processing 15
Microfinance 16
Computer hardware manufacture 17
Textiles manufacture 17
Software design 19
Corporate finance 20
Toy manufacture 21
Consumer goods 21
Consumer banking 23
Cash crops 23
Tourism 23
Personal lines 26


Angola has large petroleum reserves, and so extraction and refining are among the most attractive sectors in Angola. The size of the petroleum industry makes certain other industries seem attractive too, frequently through increasing demand, like shipbuilding, iron and steel production, and general insurance. Aircraft manufacture is made more appealing by the large government expenditure on defence, the size of the industrial sector, and the volume of goods exported. But production for export is almost exclusively petroleum, which is most cheaply transferred by ship, and defence expenditure may decline when the civil war finally ends.

The economic environment has been unfavourable - hyperinflation, very high debt, a very volatile exchange rate, a complicated procedure for setting up businesses, and an ongoing civil war. The factors make service sectors seem difficult to operate in: consumer banking, personal lines insurance, corporate finance, and tourism. They would become very strong if the environment was to improve.

The volatile exchange rate also moves cash crops down the list. Angola has been said to have some of Africa's most fertile land, which may only be partially recognised by the availability of fresh water as an input factor.

Benin


Tourism 1
Software design 2
Personal lines 3
Food processing 4
General insurance 5
Corporate finance 5
Pharmaceuticals 5
Textiles manufacture 5
Consumer banking 9
Plastics manufacture 9
Publishing 9
Industrial chemicals 9
Electronics 13
Cash crops 13
Car manufacture 13
Microfinance 16
Toy manufacture 16
Consumer goods 16
Electricity supply, water supply, gas supply 19
Computer hardware manufacture 20
Petroleum refining 21
Iron and steel production 21
Mining 21
Shipbuilding 24
Aircraft manufacture / aerospace 25


Benin has a good macroeconomic environment: low administration for setting up a company, moderate inflation, a stable exchange rate, EBA access to the EU market, good research and development incentives, low government expenditure on defence. Unsurprisingly, service industries are among the most promising. The number of tourist arrivals is presently moderate, so there may be scope for growth in their number. The general insurance and corporate finance sectors show particular promise in view of Benin's role as a transit point for goods throughout West Africa. Excellent investment incentives provide encouragement for the software industry, although the small size of the domestic services sector means that it may rely on future growth, or on exports.

Among the manufacturing industries, pharmaceutical production is promising. Benin has favourable market access, both to the EU and the ECOWAS states, notably Nigeria. The number of tertiary students is a little above the sub-Saharan median, although illiteracy is quite high, which hinders some other industries. They are also restricted by the limited size of the existing manufacturing sector.

Shipbuilding is near the bottom of the list, but in view of the considerable volume of goods passing through the country, the transportation sector may well be stronger than its position would suggest.

Botswana


Toy manufacture 1
Consumer goods 1
General insurance 3
Corporate finance 3
Iron and steel production 3
Mining 3
Aircraft manufacture / aerospace 3
Electricity supply, water supply, gas supply 8
Car manufacture 8
Consumer banking 10
Personal lines 11
Textiles manufacture 12
Food processing 13
Publishing 14
Tourism 14
Software design 16
Plastics manufacture 16
Industrial chemicals 16
Computer hardware manufacture 19
Petroleum refining 20
Electronics 20
Pharmaceuticals 22
Cash crops 23
Microfinance 24


Botswana has the one of the highest incomes per head in the continent, and the total domestic purchasing power is quite high too. The domestic market is the major reason why consumer good and toy manufacture top the list.

General insurance and corporate finance are attractive, with the large mining sector presenting direct opportunities for capital. The favourable macroeconomic situation also helps, with a small stock market and low external debt.

Heavy industry benefits from a large industrial sector, and high income per person, while domestic production of electricity is above the sub-Saharan average, which should help production. Light industry and more technological goods are comparatively less attractive, for example because of relatively moderate investment incentives and EU market access, and a modest number of tertiary students. On the other hand, local funds for development are likely to be more readily available in Botswana than elsewhere.

Burkina Faso


Cash crops 1
Mining 2
Microfinance 3
Petroleum refining 4
Iron and steel production 4
General insurance 6
Pharmaceuticals 6
Food processing 6
Personal lines 9
Plastics manufacture 9
Tourism 9
Industrial chemicals 9
Consumer banking 13
Car manufacture 13
Corporate finance 15
Computer hardware manufacture 15
Aircraft manufacture / aerospace 15
Software design 18
Electronics 19
Publishing 19
Textiles manufacture 21
Toy manufacture 22
Consumer goods 22
Electricity supply, water supply, gas supply 24


Burkina Faso's particular characteristics mean that its industrial strengths are quite varied.

Cash crops top the list, due to good export incentives, favourable market access, a stable currency, and low wages. However water per head is not high, maybe suggesting that the land may be insufficiently fertile, and the merits could be overstated. Food processing has similar strengths, although the quite low income may mean that the demand for processed foods is weak.

The population has a low average income, and there is quite a stable economic environment, which makes microfinance seem attractive. The environment also assists general insurance, of a quite large manufacturing sector. Domestic petroleum refining for that sector could be promising, perhaps using crude oil exports from Nigeria.

Burundi


Microfinance 1
Personal lines 2
Consumer banking 3
Publishing 3
Aircraft manufacture / aerospace 3
Food processing 6
General insurance 7
Tourism 7
Petroleum refining 9
Pharmaceuticals 9
Plastics manufacture 9
Textiles manufacture 9
Industrial chemicals 9
Corporate finance 14
Software design 14
Electronics 14
Toy manufacture 14
Cash crops 14
Car manufacture 14
Consumer goods 14
Computer hardware manufacture 21
Electricity supply, water supply, gas supply 21
Iron and steel production 21
Mining 21


Information on Burundi's investment incentives and law is quite difficult to find. The criteria relating to the policy environment are estimated to be moderate: administration in setting up a company, business facilitation, start-up incentives, intellectual property rights, research and development incentives, export support, trade barriers on capital inputs. Because these are often quite attractive in other sub-Saharan states, particularly among the French speaking countries, certain industries are low down the list. If the policy environment is more attractive than I have assumed, then the manufacturing industries may offer potential for profitable trade, (plastics, pharmaceuticals, textiles, chemicals).

With a quite large population with low income, mainly based in rural areas, microfinance has strong potential. Moderate inflation is another advantage. The external debt is close to the sub-Saharan average, and the financial environment is a relative strength, resulting in high placing for personal lines insurance and consumer banking. In view of the poverty of the nation, and the non-tradable nature of these industries' output, they may not be practical except on a small scale at the moment.

Cameroon


Electricity supply, water supply, gas supply 1
Food processing 1
Car manufacture 1
Personal lines 4
Software design 4
Computer hardware manufacture 4
Petroleum extraction 4
Electronics 4
Tourism 4
Petroleum refining 10
Pharmaceuticals 10
Shipbuilding 10
Aircraft manufacture / aerospace 10
Plastics manufacture 14
Industrial chemicals 14
Consumer banking 16
General insurance 17
Iron and steel production 17
Mining 17
Corporate finance 20
Publishing 20
Microfinance 22
Textiles manufacture 22
Toy manufacture 24
Consumer goods 24
Cash crops 26


Cameroon has a relatively high GDP, and high income per head. Certain of the leading industries benefit from the domestic market: electricity, water, and gas supply; food processing; car manufacture. Good export support, a large regional market, and a stable exchange rate against the Euro all help with foreign trade, including the technology sector. The sector also seems attractive because of the quite high levels of educational achievement.

Although the country has modest petroleum reserves, there is a wide range of industries in which Cameroon has comparative strengths. Many of the industrial inputs are strong.

Central African Republic


Cash crops 1
Electronics 2
Software design 3
Tourism 4
Food processing 5
Microfinance 6
Computer hardware manufacture 6
Iron and steel production 6
Mining 6
Personal lines 10
Consumer banking 10
Aircraft manufacture / aerospace 10
Corporate finance 13
Pharmaceuticals 13
Plastics manufacture 13
Toy manufacture 13
Industrial chemicals 13
Consumer goods 13
Electricity supply, water supply, gas supply 19
Car manufacture 19
General insurance 21
Petroleum refining 21
Textiles manufacture 21
Publishing 21


Cash crops top the list, with food processing high as well. Although I do not have information on agricultural potential for specific crops, the natural environment is good for production of both. The policy environment encourages exports, and is helpful to entrepreneurs, making businesses like electronics and software design seem attractive, despite limited education resources.

Some of these factors also suggest that some forms of heavy industry could be based in the Central African Republic. However, the very small size of the domestic industrial sector and low local demand would mean that production would be almost entirely aimed at possibly volatile foreign markets. Almost all equipment would have to be imported, and these features probably mean that the advantages of heavy industry are overstated.

Chad


Cash crops 1
Personal lines 2
Microfinance 2
Software design 4
Consumer banking 5
Publishing 6
Electricity supply, water supply, gas supply 7
General insurance 8
Corporate finance 8
Food processing 8
Pharmaceuticals 11
Electronics 11
Tourism 11
Petroleum refining 14
Plastics manufacture 14
Industrial chemicals 14
Aircraft manufacture / aerospace 14
Computer hardware manufacture 18
Car manufacture 18
Iron and steel production 20
Mining 20
Textiles manufacture 22
Toy manufacture 22
Consumer goods 22


Cash crops is at the top of the list, due to Chad's low population density, moderate water resources, low wages, and favourable European Union market access. A stable exchange rate against the Euro also helps, and the macro-economy is generally favourable: relatively low external debt and inflation. As a result, the financial industries aimed at households may appeal, despite quite low income per person. As the economy expands, these may become increasingly attractive.

Aside from the EU market, the regional market is a little larger than the sub-Saharan median, although it is possible that access to Sudanese and Libyan markets may be affected by conflicts. The distance from ports may make the cost of transport comparatively high. Software design would have few problems of course, taking advantage the excellent start-up incentives. Conventional manufacturing has an existing base to build on, which is close to the sub-Saharan median in size, although still small in absolute size.

Congo


Cash crops 1
Petroleum extraction 2
Petroleum refining 3
Computer hardware manufacture 4
Electricity supply, water supply, gas supply 5
Toy manufacture 6
Consumer goods 6
Electronics 8
Software design 9
Consumer banking 10
Iron and steel production 11
Aircraft manufacture / aerospace 11
Corporate finance 13
Shipbuilding 13
Plastics manufacture 15
Industrial chemicals 15
Car manufacture 17
Pharmaceuticals 18
Publishing 18
Textiles manufacture 20
Tourism 20
General insurance 22
Personal lines 22
Mining 22
Microfinance 25
Food processing 25


Congo's oil reserves, good export support, and a stable currency make both extraction and refining of petroleum attractive. The quite advantageous export environment, together with very high fresh water availability and a low population density suggest that cash crops could also be a strong specialisation.

With a comparatively high income per person, light manufacturing (consumer goods, toys,electronics) has a modest domestic base, as well as possibilities in foreign markets. The absolute size of the population is rather small, however, and the existing industry is small, so supplies may have to imported or manufactured as part of the assembly line itself.

Some of the inputs into the service sector are very favourable, while others are very unfavourable. There is little administration required to set up a company, but the manufacturing and services sectors are small. Inflation is low, gross domestic savings are high, but external debt is extremely high. As a result, certain subsectors seem to have more potential than others, according to the particular inputs used, with consumer banking currently the most appealing.



Democratic Republic of the Congo


Microfinance 1
Pharmaceuticals 1
Plastics manufacture 1
Electronics 1
Publishing 1
Industrial chemicals 6
Petroleum extraction 7
Petroleum refining 8
Food processing 8
Cash crops 8
Electricity supply, water supply, gas supply 11
Software design 12
Textiles manufacture 13
Tourism 14
Car manufacture 15
Consumer banking 16
General insurance 17
Computer hardware manufacture 17
Aircraft manufacture / aerospace 17
Iron and steel production 20
Mining 21
Toy manufacture 22
Consumer goods 22
Shipbuilding 24
Personal lines 25
Corporate finance 26


Simply the size of the D.R. Congolese population means that many industries have a reasonable demand from households, like pharmaceuticals and plastics, which also benefit from large absolute numbers of literates and tertiary students. The absolute size of the manufacturing sector is quite substantial, and industries which serve it (petroleum extraction and refining, chemical manufacture) also show moderate immediate potential.

With a large rural population with a very low average income, microfinance could be a strong industry. However, the hyperinflation of the last decade probably makes conventional loans difficult, and some form of barter type arrangement may be necessary. Inflation, together with a very high external debt and civil war, means that the industrial sector is relatively much stronger than the services sector.

Cote d'Ivoire


Software design 1
Petroleum refining 2
General insurance 3
Personal lines 3
Computer hardware manufacture 3
Tourism 3
Car manufacture 3
Consumer banking 8
Petroleum extraction 8
Aircraft manufacture / aerospace 8
Corporate finance 11
Pharmaceuticals 11
Food processing 11
Shipbuilding 11
Plastics manufacture 15
Electronics 15
Industrial chemicals 15
Textiles manufacture 18
Iron and steel production 18
Toy manufacture 20
Consumer goods 20
Microfinance 22
Publishing 22
Electricity supply, water supply, gas supply 24
Mining 25
Cash crops 26


Quite strong domestic demand supports many of the most promising industries in Cote d'Ivoire. The large manufacturing and services sectors could buy the products from the computer industry, the general insurance industry, and the petroleum refineries. High income increases demand for personal lines insurance.

On the supply side, the country is supportive for both new and existing businesses. The illiteracy rate is quite high, although so is the number of tertiary students. Export support is moderate, but less than many other African countries, and Cote d'Ivoire has less favourable access to the European Market than some. Overall, the country has current advantage in more technically complicated goods aimed initially at the domestic market.

Eritrea


Cash crops 1
Tourism 2
Corporate finance 3
Microfinance 4
Toy manufacture 4
Consumer goods 4
General insurance 7
Personal lines 7
Textiles manufacture 9
Consumer banking 10
Computer hardware manufacture 10
Electricity supply, water supply, gas supply 10
Iron and steel production 10
Mining 10
Aircraft manufacture / aerospace 10
Software design 16
Petroleum refining 16
Pharmaceuticals 16
Plastics manufacture 16
Electronics 16
Publishing 16
Food processing 16
Industrial chemicals 16
Shipbuilding 16
Car manufacture 16


The two industries at the top of the list, cash crops and tourism, are outwards looking. Neither are excessively affected by the tiny domestic household and corporate market. However, in the case of cash crops, the limited water resources may mean that the potential for development is also limited. Tourism may have more possibilities, from a currently limited base. I do not have complete information on some factors like the exchange rate, export support, and so on.

Of the industries aiming at the domestic market, corporate finance and general insurance have some strengths, notably quite rapid growth in industry and services. The manufacturing sector is relatively quite large as a proportion of the total economy, by sub-Saharan standards. Microfinance and personal lines insurance are also comparatively strong, suggesting that Eritrea could follow the traditional path of small economies towards a large, internationally open services sector. Eritrea's geographic position also would strengthen this point of view, as historically Eritrea's ports were used by Ethiopia, until the recent border war.

Among other tradable goods, light manufactures are highest on the list. I do not have much information on the investment incentives in Eritrea, and if they are attractive for exporters and manufacturers, then producing industries could become even more stronger.

Ethiopia


Microfinance 1
Consumer banking 2
Industrial chemicals 2
Pharmaceuticals 4
Plastics manufacture 4
Electronics 6
Publishing 6
Personal lines 8
Textiles manufacture 8
Food processing 8
Software design 11
Car manufacture 12
Computer hardware manufacture 13
Electricity supply, water supply, gas supply 13
Aircraft manufacture / aerospace 13
Toy manufacture 16
Tourism 16
Consumer goods 16
General insurance 19
Corporate finance 19
Cash crops 19
Petroleum refining 22
Mining 23
Iron and steel production 24


With a large rural population, a very low average income, and moderate inflation, microfinance has good potential in Ethiopia. The other household services (consumer banking, and personal lines insurance) are also comparatively strong.

On the manufacturing sector, a group of four industries appear attractive, due to a number of factors: a quite large manufacturing and services sector; quite large numbers of literates and tertiary students; good research and development incentives, and start-up incentives. They are chemicals, pharmaceuticals, plastics, and electronics. These may show economies of concentration, if they are established in one particular region.

Ghana


Textiles manufacture 1
Tourism 2
Publishing 3
Microfinance 4
Corporate finance 4
Electricity supply, water supply, gas supply 4
Food processing 4
General insurance 8
Pharmaceuticals 8
Plastics manufacture 8
Toy manufacture 8
Industrial chemicals 8
Mining 8
Consumer goods 8
Personal lines 15
Consumer banking 15
Software design 15
Electronics 15
Car manufacture 15
Aircraft manufacture / aerospace 15
Computer hardware manufacture 21
Petroleum refining 21
Iron and steel production 21
Shipbuilding 21
Cash crops 25


A number of distinct features of Ghana's economy are relatively strong, so the industries at the top of the list are quite diverse. Textiles manufacture is favoured because of quite high domestic demand, ease of setting up a company, good export support, and ready availability of the workforce. Tourism, on the other hand, benefits from a quite large number of arrivals already, and an appealing environment. Supply of electricity, water, and gas benefits from moderate natural resources.

A common factor is the strong domestic demand, arising from a sizable population and income per person a little above the sub-Saharan median. The high level of education supports industries like publishing and the services. However, modest investment incentives and a medium sized manufacturing sector means that heavy industry, like petroleum refining and iron and steel production, is comparatively weaker.

Guinea


Mining 1
Iron and steel production 2
Electronics 3
Car manufacture 4
General insurance 5
Personal lines 5
Corporate finance 5
Cash crops 5
Consumer banking 9
Computer hardware manufacture 9
Shipbuilding 9
Tourism 12
Plastics manufacture 13
Textiles manufacture 13
Toy manufacture 13
Food processing 13
Industrial chemicals 13
Consumer goods 13
Publishing 19
Pharmaceuticals 20
Electricity supply, water supply, gas supply 21
Aircraft manufacture / aerospace 21
Microfinance 23
Petroleum refining 23
Software design 25


Guinea's physical and policy environment are quite well suited to certain types of heavy industry. It has substantial mineral reserves, a comparatively large industrial sector, good export support, and favourable market access. As a result, mining, iron and steel production, and car manufacture are near the top of the list.

The potential in the industrial sector also helps general insurance and corporate finance. The whole services sector benefits from relatively low inflation, and moderate external debt. Good education levels and quite high income per person suggest that demand for consumer banking and personal insurance may be reasonable, despite a population size which is a little smaller than the median.

Kenya


Personal lines 1
Computer hardware manufacture 1
Textiles manufacture 1
Tourism 1
General insurance 5
Consumer banking 5
Publishing 5
Car manufacture 5
Microfinance 9
Corporate finance 9
Plastics manufacture 9
Food processing 9
Industrial chemicals 9
Pharmaceuticals 14
Toy manufacture 14
Shipbuilding 14
Consumer goods 14
Electronics 18
Aircraft manufacture / aerospace 18
Software design 20
Petroleum refining 20
Iron and steel production 22
Mining 22
Electricity supply, water supply, gas supply 24
Cash crops 25


Tourism was historically been a successful industry in Kenya, and it is among the most attractive industries considered. Textiles manufacture benefits from low administration for setting up a company, good export support, ready availability of urban labour, and quite strong domestic demand. Another manufacturing industry, of computer hardware, also has potential, although some of the reasons differ, like quite strong demand from relatively large manufacturing and service sectors, good education, and low import barriers on goods used in production.

The Kenyan economy is quite attractive for a variety of reasons. As a result it doesn't show any particular bias towards a sector of the economy, except that cash crops seem to be relatively unattractive. This is rather a surprise in view of the size of the agricultural sector, and reflects in part the opportunities presented elsewhere in the economy, and in part the limited availability of fresh water resources, above average population density, and comparatively limited access to the European Union market, by sub-Saharan standards.

Lesotho


Corporate finance 1
Tourism 2
Toy manufacture 3
Consumer goods 3
Personal lines 5
Electricity supply, water supply, gas supply 6
General insurance 7
Cash crops 8
Petroleum refining 9
Iron and steel production 9
Car manufacture 9
Textiles manufacture 12
Mining 13
Publishing 14
Aircraft manufacture / aerospace 14
Microfinance 16
Software design 16
Computer hardware manufacture 16
Electronics 16
Pharmaceuticals 20
Plastics manufacture 20
Food processing 20
Industrial chemicals 20
Consumer banking 24


Corporate finance tops the comparative advantage list, and the rapid growth in both services and industry provides plenty of opportunities for finance companies. The economic environment is favourable, helping all the financial services industries: quite low external debt, below median inflation, and quite high income per person. Reasonably low government defence expenditure and moderate under five mortality make Lesotho quite attractive as a tourist venue, with large numbers arriving already, relative to the country's small size.

The high income per person mean that consumer goods are likely to have modest demand, despite a very small population. Exports could be another option, as manufacturers have favourable access to the European Union market, and the South African market is very large. South Africa already imports fresh water from Lesotho.

Madagascar


Cash crops 1
Electronics 2
Software design 3
Tourism 3
Microfinance 5
Pharmaceuticals 5
Plastics manufacture 7
Toy manufacture 7
Publishing 7
Food processing 7
Industrial chemicals 7
Consumer goods 7
Consumer banking 13
Computer hardware manufacture 13
Textiles manufacture 13
Personal lines 16
Corporate finance 17
Petroleum refining 17
Car manufacture 17
General insurance 20
Mining 20
Iron and steel production 22
Electricity supply, water supply, gas supply 23
Aircraft manufacture / aerospace 23
Shipbuilding 25


Madagascar's current economic strengths make it quite attractive as a manufacturer of technological goods. For example, it has substantial numbers of tertiary students, large amounts of fresh water, a moderately sized domestic market, favourable European Union market access and good export support, and an existing manufacturing sector which is slightly bigger than the sub-Saharan average.

The promise in the industrial sector may suggest that corporate finance and general insurance could grow quickly in the future. At the moment, they are restricted by modest overall economic growth, quite high inflation, and slightly above average external debt.

Cash crops top the list. Apart from the export incentives, advantages include the substantial water resources, below average population density, moderate wages, and a comparatively stable exchange rate.

Malawi


Microfinance 1
Publishing 2
Pharmaceuticals 3
Petroleum refining 4
Textiles manufacture 4
Food processing 4
Personal lines 7
Electricity supply, water supply, gas supply 7
Plastics manufacture 7
Industrial chemicals 7
Mining 7
Corporate finance 12
Consumer banking 12
Cash crops 12
Car manufacture 12
Computer hardware manufacture 16
Toy manufacture 16
Tourism 16
Consumer goods 16
General insurance 20
Software design 21
Iron and steel production 21
Electronics 23
Aircraft manufacture / aerospace 24


Microfinance is among the most attractive industries in Malawi, serving the large, rural, low income population. The comparatively high literacy rate helps with providing it, and good education links the four industries at the top of the list: microfinance, publishing, pharmaceuticals, and petroleum refining. They are otherwise connected fairly loosely.

Good export support and favourable European Union access helps manufacturers, although the most promising industries can also sell into the domestic market: pharmaceuticals, textiles, and processed foods.

Mali


Cash crops 1
Microfinance 2
Food processing 2
Mining 4
Software design 5
Computer hardware manufacture 5
Pharmaceuticals 5
Textiles manufacture 5
Personal lines 9
Toy manufacture 9
Tourism 9
Consumer goods 9
Plastics manufacture 13
Industrial chemicals 13
Iron and steel production 13
Corporate finance 16
Consumer banking 16
Car manufacture 16
General insurance 19
Publishing 19
Electricity supply, water supply, gas supply 21
Electronics 21
Petroleum refining 23
Aircraft manufacture / aerospace 24


Mali has a very attractive environment for exporters. The exchange rate against the Euro is stable, export support is good, and producers have preferential access to the European Union market. The overseas market is very important in six of the top seven industries listed, and each also benefits from other supporting factors. Growing cash crops is helped by above median availability of fresh water, and below average population density, although these results may be a bit misleading as the fertile land may be concentrated in the Southern part of the country. Some domestic production of electricity and quite rapid industrial growth helps supply and demand for mining.

Software design, computer hardware manufacture, and pharmaceutical manufacture are assisted by excellent start-up, facilitation, and research and development incentives, although the high illiteracy and small number of tertiary students may slow down growth in technological sector in the future. Low wages keep down costs in textiles manufacture. On the other hand, low income per person means that the domestic market is not strong, and if it grows, then the industry may be less exposed to changes in international terms of trade.

Microfinance is second in the list, with the large, rural, low income population perhaps best able to allocate capital profitably.

Mauritania


Cash crops 1
Toy manufacture 2
Consumer goods 2
Mining 4
Shipbuilding 5
Iron and steel production 6
Textiles manufacture 7
Aircraft manufacture / aerospace 7
Electricity supply, water supply, gas supply 9
Consumer banking 10
Petroleum refining 10
Tourism 10
Car manufacture 10
Corporate finance 14
Computer hardware manufacture 14
Software design 16
Food processing 16
Microfinance 18
Pharmaceuticals 18
Plastics manufacture 18
Electronics 18
Industrial chemicals 18
General insurance 23
Publishing 23
Personal lines 25


Cash crops are at the top of the Mauritania's industries, due to good export support, favourable European Union market access, low population density, and fresh water availability close to the median. I don't have information on the fertility of Mauritanian soil, and as much of the country is covered by desert, the advantages of cash crops may be overstated.

The favourable export regime also makes consumer good and toy manufacture attractive. They are also helped by the ease of setting up a company, and an above median income per person. The domestic market is small, however, so large scale production is likely to need foreign openings. The same is true of textiles production. Shipbuilding is an industry which could have potential, both for exporting Mauritanian goods, and also the goods of landlocked countries to the East, if Mauritania becomes a transit point in the future. The country also shows potential for extracting and exporting its iron and mineral resources, or using them to develop further its industrial sector.

Mozambique


Electricity supply, water supply, gas supply 1
Cash crops 2
Microfinance 3
Computer hardware manufacture 3
Aircraft manufacture / aerospace 5
Food processing 6
Software design 7
Shipbuilding 7
Pharmaceuticals 9
Mining 9
Plastics manufacture 11
Publishing 11
Industrial chemicals 11
Personal lines 14
Consumer banking 14
Iron and steel production 14
Corporate finance 17
Electronics 17
General insurance 19
Car manufacture 19
Petroleum refining 21
Textiles manufacture 21
Toy manufacture 23
Consumer goods 23
Tourism 25


Mozambique has quite considerable natural resources, with coal and gas reserves, and hydropower. With total domestic income close to the sub-Saharan average, and a large regional export market, utility supply tops the comparative advantage list. The substantial water resources also help to make cash crop production attractive, along with low wages, favourable European Union market access, and good export support.

The favourable policy environment includes start-up incentives and business facilitation. Industries like computer hardware manufacture and software design seem quite appealing, although the modest level of education in the country means that supply constraints may occur in the short and medium term. The aerospace industry is near the top of the list, although the high expenditure from the military may not last long, and exports of goods are a little below average. Less capital intensive industries may better suit existing resource availability.

Namibia


Electricity supply, water supply, gas supply 1
Toy manufacture 1
Consumer goods 1
Iron and steel production 4
Corporate finance 5
General insurance 6
Consumer banking 7
Tourism 7
Shipbuilding 7
Personal lines 10
Textiles manufacture 10
Mining 12
Car manufacture 12
Computer hardware manufacture 14
Petroleum refining 14
Electronics 16
Aircraft manufacture / aerospace 16
Publishing 18
Food processing 18
Plastics manufacture 20
Industrial chemicals 20
Pharmaceuticals 22
Software design 23
Cash crops 23
Microfinance 25


Namibia has a high income, if small, domestic market, and a very strong regional market, and it offers good export support to gain entry to it. Most of the promising industries take advantage of these strengths. In the case of electricity and gas supply, Namibia has natural resources which help production. It exports uranium, and has moderate gas reserves. Consumer good and toy manufacture benefit from low administration in setting up a company, and a manufacturing sector which is slightly larger than the median.

With no external debt and moderate inflation, and quite large services and industrial sectors, the environment for financial services is quite appealing, and general insurance and corporate finance are quite strong. Consumer banking and personal lines also show potential.

Niger


Cash crops 1
Microfinance 2
Electricity supply, water supply, gas supply 2
Software design 4
Pharmaceuticals 5
Food processing 6
Computer hardware manufacture 7
Mining 7
Personal lines 9
Plastics manufacture 9
Industrial chemicals 9
Car manufacture 12
General insurance 13
Consumer banking 13
Electronics 13
Iron and steel production 13
Publishing 17
Tourism 17
Corporate finance 19
Petroleum refining 19
Textiles manufacture 21
Toy manufacture 22
Aircraft manufacture / aerospace 22
Consumer goods 22


Niger has a very strong policy environment, balanced by limited educational resources. Export support is good, Nigerien producers have favourable European Union market access, and the exchange rate against the Euro is stable. With low wages and population density, growing cash crops seems to be very attractive. Some other factors suggest that production may be more challenging: large parts of the country are desert and fresh water resources are only moderate.

The food processing or packaging industry could expand rapidly if agricultural production does. At the moment, the manufacturing sector is small. The incentives and faciliation offered to businesses are excellent, and they are responsible for making a number of the technological industries seem appealing, like computer software, pharmaceuticals, and computer hardware manufacture. The present low educational level probably means that they will remain small, perhaps producing profitably for the domestic market, but with limited room for expansion.

Microfinance offers possibilities. The low income population is slightly larger than median, although its sparseness may present some operational problems.

Niger has some coal deposits, and exports uranium, so electricity production may be possible, either aimed at Nigerien consumers, or at the large regional market. The same is true of water supply.

Nigeria


Microfinance 1
Consumer banking 1
Electricity supply, water supply, gas supply 1
Petroleum extraction 1
Petroleum refining 1
Publishing 1
General insurance 7
Personal lines 7
Corporate finance 7
Software design 7
Computer hardware manufacture 7
Pharmaceuticals 7
Plastics manufacture 7
Electronics 7
Textiles manufacture 7
Food processing 7
Tourism 7
Industrial chemicals 7
Iron and steel production 7
Mining 7
Shipbuilding 7
Car manufacture 7
Aircraft manufacture / aerospace 7
Toy manufacture 24
Consumer goods 24
Cash crops 26


Nigeria has a vast domestic market and considerable natural and human resources. As a result, it comes near the top of almost every list of absolute advantage. Only cash crop production, aimed at foreign markets, seems less attractive. So I look at those industries which most clearly strong, rather than all of them with potential.

Petroleum extraction and refining are predictably appealing - the country has the largest petroleum reserves in sub-Saharan Africa by far. The other four leading industries all target parts of the very large population. For microfinance, the market could be the hundred million people with incomes below $1,000 dollars per year. The above median literacy rate helps on the supply side, and also suggests that the market might be financially sophisticated enough for the industry to become widely accepted. The same is true of consumer banking. The importance of the above average level of education is obvious in the case of publishing.

Finally, electricity, gas, and water supply could use the substantial local gas and hydropower for production, or the moderately large coal deposits. The demand is clear.

Rwanda


Aircraft manufacture / aerospace 1
Electricity supply, water supply, gas supply 2
Microfinance 3
Mining 3
Petroleum refining 5
Textiles manufacture 5
Publishing 7
Corporate finance 8
Iron and steel production 8
General insurance 10
Toy manufacture 10
Food processing 10
Consumer goods 10
Computer hardware manufacture 14
Personal lines 15
Pharmaceuticals 15
Software design 17
Plastics manufacture 17
Industrial chemicals 17
Consumer banking 20
Car manufacture 20
Electronics 22
Tourism 23
Cash crops 24


Aircraft manufacture / aerospace leads the Rwandese list, supported by high government spending on defence, and a moderately sized manufacturing sector. In practise, much spending has been on regional ground wars, so the attractiveness of the sector may be overstated.

The presence of gas reserves could make gas or electricity supply profitable. The target market could be either the manufacturing sector, or the household sector, although the latter demand is likely to be limited. Alternatively, producers could benefit from the good export support to sell to the growing regional market.

Rwanda's policy environment is quite liberal, and incentive schemes for manufacturers of technical products are moderate by African standards. So many forms of manufacturing seem relatively less appealing. However, in the case of textiles manufacture, low administration for setting up a company, low labour costs, strong export support, and preferential European Union market access make production seem favourable.

Senegal


Toy manufacture 1
Consumer goods 1
Software design 3
Computer hardware manufacture 3
Mining 5
Car manufacture 6
Textiles manufacture 7
Tourism 7
Iron and steel production 7
General insurance 10
Personal lines 11
Corporate finance 11
Petroleum refining 11
Pharmaceuticals 14
Plastics manufacture 14
Food processing 14
Industrial chemicals 14
Consumer banking 18
Cash crops 19
Aircraft manufacture / aerospace 19
Shipbuilding 21
Electronics 22
Publishing 23
Microfinance 24
Electricity supply, water supply, gas supply 25


Senegal's economic advantages strongly support its manufacturing sector. It is easy to set up a company, and incentives and facilitation are excellent. Export support is good, the country has preferential European Union market access, and the exchange rate against the Euro is stable. The domestic market is a little larger than median, with relatively quite high income per person. As a result, many industries near the top of the comparative advantage list are in manufacturing, of consumer goods, toys, cars, textiles, and computer hardware.

Software design shares many of the characteristics of conventional manufacturing, and also benefits from a large number of tertiary students. On the other hand, the high level of illiteracy may be a brake in the medium term. It is also partially responsible for making some of the financial services seem less attractive, when they would otherwise be very strong in a favourable economic environment, and a growing industrialising economy.

Sierra Leone


Cash crops 1
Aircraft manufacture / aerospace 2
Shipbuilding 3
Computer hardware manufacture 4
Electronics 5
Software design 6
Mining 7
Microfinance 8
Petroleum refining 8
Toy manufacture 8
Consumer goods 8
Pharmaceuticals 12
Textiles manufacture 12
Plastics manufacture 14
Industrial chemicals 14
Publishing 16
Iron and steel production 16
Car manufacture 16
Personal lines 19
Consumer banking 19
Electricity supply, water supply, gas supply 19
Corporate finance 22
Food processing 22
General insurance 24
Tourism 24


Sierra Leone has a very strong policy environment. There is low administration when setting up a company, incentives are very good, and intellectual property rights are relatively well protected. Export support is excellent, with preferential European Union access and a moderately stable exchange rate against the Euro. Wages are very low, which gives the country comparative advantage in export industries. A couple of the leading industries, shipbuilding and aerospace, directly serve the export sector. Air transport may be too expensive for exporting most Leonean goods, however, so the sector may seem better than it really is.

Among the exporting industries, cash crops have strong potential, as fresh water resources are large, and population density is moderate. Reasonable education and excellent incentives to start up companies make certain technological industries attractive. Mining is high on the list, and is already a well-established industry.

South Africa


General insurance 1
Personal lines 1
Corporate finance 1
Software design 1
Computer hardware manufacture 1
Pharmaceuticals 1
Plastics manufacture 1
Electronics 1
Textiles manufacture 1
Toy manufacture 1
Food processing 1
Cash crops 1
Tourism 1
Industrial chemicals 1
Iron and steel production 1
Mining 1
Shipbuilding 1
Car manufacture 1
Aircraft manufacture / aerospace 1
Consumer goods 1
Consumer banking 21
Electricity supply, water supply, gas supply 21
Petroleum refining 21
Publishing 21
Microfinance 25


South Africa has the third largest population of sub-Saharan states, and a GDP per head many times the average. As the biggest and most diversified economy in the region by far, it tops most lists of absolute advantage. Microfinance seems a little less appealing, as the high average income per head makes it more similar to conventional banking.

The economic environment is favourable: relatively low external debt, a very large stock market, and moderate inflation. The policy environment is less generous than some states, with moderate incentives and export support.

Tanzania


Cash crops 1
Microfinance 2
Textiles manufacture 2
Food processing 2
Consumer banking 5
Publishing 6
Toy manufacture 7
Consumer goods 7
Computer hardware manufacture 9
Tourism 9
Personal lines 11
Mining 12
Corporate finance 13
Electricity supply, water supply, gas supply 13
Car manufacture 13
General insurance 16
Pharmaceuticals 16
Plastics manufacture 16
Industrial chemicals 16
Petroleum refining 20
Electronics 20
Iron and steel production 20
Software design 23
Shipbuilding 23
Aircraft manufacture / aerospace 25


Two aspects of Tanzania's economy strongly influence its comparative advantages: a large, low income population, and a liberal, outward looking policy environment. Some of the most promising industries target both the domestic and the export markets.

Cash crops top the list, due to low wages, good export support, and favourable European Union market access. The advantages are judged to offset quite low fresh water availability. These factors are also important for textiles, consumer goods, and toy manufacturers, and food processing businesses. A little further down is computer hardware production. The reasonably high education levels help the industry, despite new business incentive and facilitation schemes that are only moderate by African standards.

Demand for textiles and consumer goods is supported by the large Tanzanian population. Publishing, consumer banking, and microfinance companies could target the domestic market specifically. As with cash crops and food processing, the last two industries show the scope for economies of concentration or scale. The microfinance business aims at the large, low income population. The above average literacy rate suggests that the industry could be widely accepted.

Togo


Cash crops 1
Toy manufacture 2
Consumer goods 2
Mining 4
Tourism 5
Petroleum refining 6
Textiles manufacture 6
Personal lines 8
Corporate finance 8
Consumer banking 8
Software design 8
Pharmaceuticals 8
Plastics manufacture 8
Industrial chemicals 8
Iron and steel production 8
Aircraft manufacture / aerospace 8
Publishing 17
Food processing 17
Car manufacture 17
Microfinance 20
Computer hardware manufacture 20
Electricity supply, water supply, gas supply 22
Electronics 22
General insurance 24


Many of Togo's economic statistics are close to the sub-Saharan median: its external debt, its growth rate, its literacy, its government defence expenditure, amongst others. With limited natural energy resources, the country's economic direction can be particularly sensitive to the policy environment. In Togo, with a quite small population, it is liberal and reinforces outwards directed growth. Togolese producers have favourable access to the European Union market, and export support is good, although start-up incentives are modest by sub-Saharan standards. The exchange rate against the Euro is stable.

So the industries which may be most promising are export driven. Cash crops top the list, despite restricted fresh water resources, followed by consumer good and toy manufacturers. Mineral sales, particularly phosphates, already generate substantial revenues. Other industries, shipbuilding and petroleum refining, service the export sector, and they may allow integration with the larger regional economies like Nigeria and Cote d'Ivoire. Tourism is presently small, but the conditions for future growth seem to be in place.

Uganda


Corporate finance 1
Iron and steel production 1
Mining 1
General insurance 4
Microfinance 4
Textiles manufacture 4
Personal lines 7
Publishing 8
Car manufacture 8
Aircraft manufacture / aerospace 8
Computer hardware manufacture 11
Petroleum refining 11
Plastics manufacture 11
Industrial chemicals 11
Consumer banking 15
Pharmaceuticals 15
Tourism 15
Software design 18
Electronics 18
Toy manufacture 18
Consumer goods 18
Food processing 22
Electricity supply, water supply, gas supply 23
Cash crops 24


Uganda has had very high economic growth in recent years, and the geared effect on financial services has made the industry extremely promising. Corporate finance, general insurance, and microfinance are all among the leading comparative advantage industries. In the case of microfinance, one report has said that there is a strong unmet demand in the regions away from Uganda. The policy environment is liberal, and encourages the free market. It is easy to set up a company, and incentives and export support are modest by sub-Saharan standards. The external debt is relatively quite low, and inflation a little above the median.

The manufacturing sector and total Gross Domestic Product are quite large, and trade barriers on imports of capital goods are low. Heavy industry (iron and steel production, mining) seems appealing, more than the technological industries that could benefit from generous incentive schemes, or a protected environment. The education level in the country is a little better than median.

Zambia


Electricity supply, water supply, gas supply 1
Aircraft manufacture / aerospace 2
Publishing 3
Mining 3
Corporate finance 5
Petroleum refining 5
Plastics manufacture 5
Industrial chemicals 5
General insurance 9
Pharmaceuticals 9
Iron and steel production 9
Personal lines 12
Electronics 12
Computer hardware manufacture 14
Car manufacture 14
Microfinance 16
Textiles manufacture 16
Cash crops 16
Consumer banking 19
Software design 19
Toy manufacture 19
Consumer goods 19
Tourism 23
Food processing 24


There are considerable hydropower resources in Zambia, and small coal deposits. With a moderate domestic market, and large regional market, electricity and water supply are among the strongest businesses in the country. Local production of electricity is relatively high, and could support industries like aerospace, mining, and petroleum refining. The size of the manufacturing sector is close to the sub-Saharan median at present.

The liberal policy environment tends to favour heavy industry rather than more technological industries, as the research and development, and other incentives are moderate by sub-Saharan standards. They are, however, supported by a good level of education.

The service sector grew quickly over the last decade, while the industrial sector contracted equally strongly. It is easy to set up a company, but the macroeconomy is not favourable, with high debt and inflation (although this has remained below hyperinflation). As a result, the financial services sector is not as appealing as it might be, although again the good education helps both supply and demand.

Zimbabwe


Aircraft manufacture / aerospace 1
Software design 2
General insurance 3
Corporate finance 3
Personal lines 5
Petroleum refining 5
Plastics manufacture 5
Tourism 5
Industrial chemicals 5
Car manufacture 5
Pharmaceuticals 11
Textiles manufacture 11
Toy manufacture 11
Publishing 11
Shipbuilding 11
Consumer goods 11
Consumer banking 17
Electricity supply, water supply, gas supply 17
Electronics 17
Food processing 20
Computer hardware manufacture 21
Iron and steel production 22
Microfinance 23
Mining 24
Cash crops 25


Zimbabwe's good level of education, both literacy rates and at the tertiary level, links all its high potential industries. The top one is aerospace, with a large manufacturing sector able to supply it. Currently, defence spending is quite high, although it may reduce when the several regional conflicts are resolved, and the industry may seem less appealing.

Software design is quite strong, providing for the large services sector, which grew steadily during the 1990s. The policy environment is liberal, and does not provide extensive incentives and facilitation to new businesses, which moderates the sectors appeal. Demand for financial services may also be strong, as the services and industrial sectors are large, but the steady contraction in industry over the last decade may weaken it substantially. External debt and inflation are moderate. Export conditions are not strong, with support and European Union market access less favourable than in some other countries, although the size of the domestic economy provides some protection from international conditions.



Appendix


The methodology

I used three stages to construct the tables:

Stage 1:
I prepared a list of absolute strengths of industries for a country.

The absolute strength for an industry was calculated as

(1 + input1 / k1) x (1 + input2 / k2) x ... x (1 + input n / k n)

where
n is an integer fixed for each industry,
{input1, input2, ..., input n} are numbers like literacy rate, the size of Gross Domestic Product, or the volume of exports in a country. They are also industry specific.
{k1, k2, ..., k n} are industry specific constants.

For a few factors, the values were restricted to a maximum or minimum. For example, when a country has hyperinflation, the input may have a minimum value of 0.5.

Stage 2:
I put in order the list of countries for each industry, to find a country's position in it. So if a state gets the 18th highest score for microfinance, then it will come 18th in the microfinance list.

Stage 3:
For each country, I take the positions in the industry lists, and order them. The ordered lists, without the scores, are shown in the report.

The industries considered

With the notation described above:

Industry

Input

k

Notes

General insurance

Industrial GDP + 50% of services GDP (billions US$)

1

 

 

Population with income above $1,000 per year (millions)

5

 

 

Capitalisation of stockmarket (% of GDP)

3

 

 

Present value of external debt (% of GDP)

-6

 

Personal lines insurance

Population with income above $1,000 per year (millions)

2

 

 

Population (millions)

100

 

 

Capitalisation of stockmarket (% of GDP)

5

 

 

Present value of external debt (% of GDP)

-10

 

 

Illiteracy rate (% of males age 15 years and older)

-5

 

 

Average inflation (1990 - 1998)

-10

Minimum of 0.5

Microfinance

Size of agricultural sector (% of GDP)

7

 

 

GDP per person

-10000

 

 

Average inflation (1990 - 1998)

-10

Minimum of 0.5

 

Population with income below $1,000 per year

5

 

 

Population (millions)

10

 

 

Illiteracy rate (% of males age 15 years and older)

-10

 

Corporate finance

Illiteracy rate (% of males age 15 years and older)

-2

 

 

Absolute size of the industrial sector (billions US$)

2

 

 

Absolute size of the services sector (billions US$)

4

 

 

Capitalisation of stockmarket (% of GDP)

2

 

 

Administration in setting up a company (1 = low, 3 = high)

-20

 

 

Average inflation (1990 - 1998)

-10

Minimum of 0.5

 

% growth of services value added per year (1990-1998)

100

 

 

% growth of industrial value added per year (1990-1998)

50

 

 

Present value of external debt (% of GDP)

-10

 

Consumer banking

Average inflation (1990 - 1998)

-10

Minimum of 0.5

 

Gross domestic saving (% of GDP)

100

 

 

GDP per person

10000

 

 

Population with income above $1,000 per year (millions)

20

 

 

Population (millions)

40

 

 

Capitalisation of stockmarket (% of GDP)

5

 

 

Illiteracy rate (% of males age 15 years and older)

-5

 

 

Absolute size of urban population (millions)

80

 

Computer software design

Illiteracy rate (% of males age 15 years and older)

-10

 

 

Tertiary students enrolled

100000

Maximum of 1.5

 

European Union market access (1 = restricted, 3 = preferential)

-30

 

 

Export support (1 = low, 3 = high)

10

 

 

Absolute size of the services sector (billions US$)

10

 

 

Start up incentives to computer software producers

10

 

 

Business faciliatation

10

 

Computer hardware manufacture

Illiteracy rate (% of males age 15 years and older)

-10

 

 

Fresh water resources per person (cubic metres)

1000000

 

 

Absolute size of manufacturing sector (billions US$)

10

 

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-10

 

 

European Union market access (1 = restricted, 3 = preferential)

-30

 

 

Start up incentives to computer hardware manufacturers

10

 

 

Export support (1 = low, 3 = high)

10

 

 

Absolute size of the services sector (billions US$)

10

 

Electricity, water, and gas supply

Illiteracy rate (% of males age 15 years and older)

-20

 

 

Estimated natural gas reserves (Trillion cubic feet)

1

 

 

Estimated recoverable coal (millions short tons)

1000

 

 

Uranium reserves (1 if the country exports nuclear materials to the United States, 0 if not)

0.5

 

 

Net hydroelectric power resources (billion kilowatthours)

1

 

 

GDP per person

3000

 

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-10

 

 

Absolute size of industrial sector in surrounding states (billions US$)

100

 

 

Population with income above $1,000 per year (millions)

20

 

Petroleum extraction

Crude oil reserves (billions of barrels)

1

Function is 0 + crude oil reserves / 1

 

Absolute size of manufacturing sector (billions US$)

10

 

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-10

 

Petroleum refining

Illiteracy rate (% of males age 15 years and older)

-10

 

 

Crude oil reserves (billions of barrels)

5

 

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-20

 

 

Absolute size of manufacturing sector (billions US$)

4

 

Pharmaceutical manufacture

Illiteracy rate (% of males age 15 years and older)

-10

 

 

Tertiary students enrolled

100000

Maximum of 1.5

 

Population (millions)

100

 

 

Population with income above $1,000 per year (millions)

10

 

 

Research and development incentives (1 = low, 3 = high)

30

 

 

Absolute size of manufacturing sector (billions US$)

10

 

 

European Union market access (1 = restricted, 3 = preferential)

-30

 

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-30

 

 

Export support (1 = low, 3 = high)

30

 

 

Protection for intellectual property rights (1 = weak, 3 = strong)

30

 

Plastics manufacture

Illiteracy rate (% of males age 15 years and older)

-10

 

 

Tertiary students enrolled

100000

See * at base

 

Population (millions)

100

 

 

Population with income above $1,000 per year (millions)

10

 

 

Research and development incentives (1 = low, 3 = high)

30

 

 

European Union market access (1 = restricted, 3 = preferential)

-30

 

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-30

 

 

Export support (1 = low, 3 = high)

30

 

 

Industrial GDP + 50% of services GDP (billions US$)

30

 

Electronics manufacture

Illiteracy rate (% of males age 15 years and older)

-10

 

 

Tertiary students enrolled

100000

Maximum of 1.5

 

Population (millions)

100

 

 

Population with income above $1,000 per year (millions)

10

 

 

Research and development incentives (1 = low, 3 = high)

30

 

 

European Union market access (1 = restricted, 3 = preferential)

-30

 

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-30

 

 

Export support (1 = low, 3 = high)

30

 

 

Industrial GDP + 50% of services GDP (billions US$)

30

 

 

Fresh water resources per person (cubic metres)

50000

Maximum of 1.5

Textiles manufacture

GDP per person

-10000

 

 

Administration in setting up a company (1 = low, 3 = high)

-20

 

 

Export support (1 = low, 3 = high)

20

 

 

European Union market access (1 = restricted, 3 = preferential)

-20

 

 

Absolute size of urban population (millions)

200

Maximum of 1.1

 

GDP (billions US$)

10

 

Toy manufacture

GDP per person

5000

 

 

Administration in setting up a company (1 = low, 3 = high)

-20

 

 

Export support (1 = low, 3 = high)

20

 

 

European Union market access (1 = restricted, 3 = preferential)

-20

 

 

Absolute size of urban population (millions)

200

Maximum of 1.1

 

GDP (billions US$)

100

 

 

Absolute size of manufacturing sector (billions US$)

20

 

Publishing

Absolute number of literate males aged 15 and older

10

 

 

GDP per person

5000

 

 

Tertiary students enrolled

100000

Maximum of 1.5

 

Government expenditure on defence (% of GDP)

-50

 

Food processing

GDP per person

5000

 

 

GDP (billions US$)

10

 

 

Absolute size of agricultural sector (billions US$)

1

 

 

Export support (1 = low, 3 = high)

10

 

 

European Union market access (1 = restricted, 3 = preferential)

-10

 

Cash crops

Population density (people per square kilometre)

-1000

 

 

Fresh water resources per person (cubic metres)

1000000

 

 

GDP per person

-5000

 

 

Export support (1 = low, 3 = high)

10

 

 

European Union market access (1 = restricted, 3 = preferential)

-10

 

 

High exchange rate / low exchange rate in 2001

-20

 

 

GDP (billions US$)

100

 

Tourism

Estimate of existing tourist arrivals (1 = low, 4 = high)

10

 

 

Population with income above $1,000 per year (millions)

10

 

 

Under five deaths per 1,000 births

-1000

 

 

Government expenditure on defence (% of GDP)

-20

 

 

High exchange rate / low exchange rate in 2001

-20

 

Industrial chemicals

Illiteracy rate (% of males age 15 years and older)

-10

 

 

Tertiary students enrolled

100000

Maximum of 1.5

 

Population (millions)

100

 

 

Population with income above $1,000 per year (millions)

10

 

 

Research and development incentives (1 = low, 3 = high)

30

 

 

European Union market access (1 = restricted, 3 = preferential)

-30

 

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-30

 

 

Export support (1 = low, 3 = high)

30

 

 

Industrial GDP + 50% of services GDP (billions US$)

30

 

Iron and steel production

Export support (1 = low, 3 = high)

10

 

 

European Union market access (1 = restricted, 3 = preferential)

-10

 

 

Absolute size of industrial sector (billions US$)

5

 

 

Domestic electricity production (billion kilowatthours)

200

 

 

GDP per person

10000

 

Mining

Export support (1 = low, 3 = high)

10

 

 

European Union market access (1 = restricted, 3 = preferential)

-10

 

 

Absolute size of industrial sector (billions US$)

8

 

 

Domestic electricity production (billion kilowatthours)

200

 

 

GDP per person

10000

 

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-10

 

Shipbuilding

Export support (1 = low, 3 = high)

10

 

 

European Union market access (1 = restricted, 3 = preferential)

-10

 

 

Absolute size of industrial sector (billions US$)

8

 

 

Domestic electricity production (billion kilowatthours)

200

 

 

GDP per person

10000

 

 

Government expenditure on defence (% of GDP)

20

 

 

Goods and services exported (billions US$)

10000

 

 

Illiteracy rate (% of males age 15 years and older)

-5

 

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-10

 

Car manufacture

Export support (1 = low, 3 = high)

10

 

 

European Union market access (1 = restricted, 3 = preferential)

-10

 

 

Population with income above $1,000 per year (millions)

1

 

 

Domestic electricity production (billion kilowatthours)

200

 

 

GDP per person

5000

 

 

Illiteracy rate (% of males age 15 years and older)

-5

 

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-10

 

Aircraft manufacture / aerospace

Export support (1 = low, 3 = high)

10

 

 

European Union market access (1 = restricted, 3 = preferential)

-10

 

 

Absolute size of industrial sector (billions US$)

8

 

 

Domestic electricity production (billion kilowatthours)

200

 

 

GDP per person

10000

 

 

Government expenditure on defence (% of GDP)

5

 

 

Goods and services exported (billions US$)

10000

 

 

Illiteracy rate (% of males age 15 years and older)

-5

 

 

Tertiary students enrolled

100000

Maximum of 1.5

 

Trade barriers on imports on capital goods (1 = low, 3 = high)

-10

 

 

Population with income above $1,000 per year (millions)

10

 

Consumer goods

GDP per person

5000

 

 

Administration in setting up a company (1 = low, 3 = high)

-20

 

 

Export support (1 = low, 3 = high)

20

 

 

European Union market access (1 = restricted, 3 = preferential)

-20

 

 

Absolute size of urban population (millions)

200

Maximum of 1.1

 

GDP (billions US$)

100

 

 

Absolute size of manufacturing sector (billions US$)

20

 

 

* Due to a processing error, this was not set at a maximum of 1.5, so the importance is overstated. The plastics manufacture results should be the same as those of industrial chemical manufacture.

The inputs included

The factors are historic, and the current values may differ substantially. All World Development Report data is circa 1998, unless otherwise indicated. The US Government data is circa 1999. The www.investinginafrica.org data is from early 2001. In a few instances, when I did not have complete information, I assumed that a factor was the same as the sub-Saharan average.

Factor

Source

% growth of industrial value added per year (1990-1998)

World Development Report 1999/2000, World Bank (WDR).  Eritrean data uses Ethiopian numbers instead.

% growth of services value added per year (1990-1998)

WDR.  Eritrean data uses Ethiopian numbers instead.

Absolute number of literate males aged 15 and older

WDR

Absolute size of agricultural sector (billions US$)

WDR

Absolute size of industrial sector in surrounding states (billions US$)

WDR

Absolute size of manufacturing sector (billions US$)

WDR

Absolute size of the industrial sector (billions US$)

WDR

Absolute size of the services sector (billions US$)

WDR

Absolute size of urban population (millions)

WDR

Administration in setting up a company (1 = low, 3 = high)

Subjectively assessed from www.investinginafrica.org, James Waters

Average inflation (1990 – 1998)

WDR

Business facilitation

Subjectively assessed from www.investinginafrica.org

Capitalisation of stockmarket (% of GDP)

WDR

Crude oil reserves (billions of barrels)

US Government http://www.eia.doe.gov/emeu/iea/table81.html

Estimate of existing tourist arrivals (1 = low, 4 = high)

World Tourism Organisation, Yearbook of Tourism Statistics 1997, and James Waters’ estimates

Estimated natural gas reserves (Trillion cubic feet)

US Government http://www.eia.doe.gov/emeu/iea/table81.html

Estimated recoverable coal (millions short tons)

US Government http://www.eia.doe.gov/emeu/iea/table55.html

European Union market access (1 = restricted, 3 = preferential)

European Union http://europa.eu.int/comm/trade/bilateral/acp/acp.htm

Export support (1 = low, 3 = high)

Subjectively assessed from www.investinginafrica.org

Fresh water resources per person (cubic metres)

WDR

GDP (billions US$)

WDR

GDP per person

WDR

Goods and services exported (billions US$)

WDR, except the DRC http://www.worldbank.org/data/countrydata/aag/zar_aag.pdf

Government expenditure on defence (% of GDP)

WDR

Gross domestic saving (% of GDP)

WDR

High exchange rate against the Euro / low exchange rate in 2001

www.oanda.com.  It is not a government body, but in my experience, it is reliable.  I believe the rates include foreign exchange expenses.

Illiteracy rate (% of males age 15 years and older)

WDR

Industrial GDP + 50% of services GDP (billions US$)

WDR

Net hydroelectric power resources (billion kilowatt-hours)

US Government http://www.eia.doe.gov/emeu/iea/table26.html

Uranium reserves (1 if the country exports nuclear materials to the United States, 0 if not)

US Government http://www.eia.doe.gov/cneaf/nuclear/uia/table12.html

Population (millions)

WDR

Population density (people per square kilometre)

WDR

Population with income above $1,000 per year (millions)

Estimates based on data from WDR

Population with income below $1,000 per year

Estimates based on data from WDR

Present value of external debt (% of GDP)

WDR

Protection for intellectual property rights (1 = weak, 3 = strong)

US Government http://www.usatrade.gov/website/CCG.nsf

Research and development incentives (1 = low, 3 = high)

Subjectively assessed from www.investinginafrica.org

Size of agricultural sector (% of GDP)

WDR

Start up incentives to computer hardware manufacturers

Subjectively assessed from www.investinginafrica.org

Start up incentives to computer software producers

Subjectively assessed from www.investinginafrica.org

Tertiary students enrolled

UNESCO data circa 1990 http://www.uis.unesco.org/pagesen/EnrolTerSexReg%5CETerSex19000.asp?

ano=1990,1991,1992,1993,1994,1995,1996,1997,&nomreg=Africa

Trade barriers on imports on capital goods (1 = low, 3 = high)

Subjectively assessed from www.investinginafrica.org

Under five deaths per 1,000 births

WDR