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Mozambican transaction costs 2008

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1 Introduction

Africa, compared to other regions, has the highest incidence of poverty. With research showing a positive link between exports and growth, a rise in exports out of Africa is essential for sustained growth of the continent. However, Africa has been unsuccessful to capture the international market and make use of this vehicle to steer away from poverty.

How can this situation be altered? Until now the private sector has contributed very little to growth in Africa, mainly due to the crowding out by the public sector. There is a growing consensus amongst researchers that a thriving private sector is crucial for sustained economic growth and a thriving export sector. The remaining question is what role government should play. The two extremes seem to be on the one hand a government that steers the export sector in a specific direction; and on the other a government that plays no further role than to create an environment supportive of the private sector.

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