Browsing by Author "Estiphanos, Girma (PhD)"
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Item An Analysis of Foreign Direct Investment: The Case of Ethiopia: Co-Integrated VAR Approach(2015-06) Berhane, Asmelash; Estiphanos, Girma (PhD)paper gives analysis on Foreign Direct Investment (FDI) in Ethiopia based on study using Co-integrated VAR approach over the period 1974/75 to 2013/14. It in particular examines the trend of FDI inflow on regional, sectoral and by country of origin bases. The study also discusses why Ethiopia is conducive for Foreign Direct Investment, the area of opportunity, the problems faced by foreign investors and the institutional and regulatory framework. In order to point out the main factors that can highly affect the inflow of FDI in Ethiopia and to know how much these factors affect FDI leading to an oscillating trend, the study took the determinant of FDI in Ethiopia such as infrastructure development, the domestic market size and growth potential, macroeconomic stability, human capital development, openness, and external debt and evaluate as to how they affect the inflow of FDI. In the analysis there are findings. Firstly, I found that in the long run explanatory variable such as infrastructure development, the domestic market size, Human Capital, openness, and external debt are found positively related and statistically significant while inflation rate is negatively related and statistically significant. Secondly, in the short run Gross Fixed Capital Formation and inflation become negatively related and they are statistically significant while Gross Domestic Product is positively related and statistically significant that supports the hypothesis that the growing economy attracts more FDI. While the remaining variables of debt servicing, openness, and human capital has a positive coefficient but is insignificant in the short run. Thirdly, there is bi directional causality between Gross Fixed Capital Formation and FDI and the variables of inflation, Gross Domestic Product, Debt Servicing, Openness and Human Capital does Granger- causes foreign direct investment but not the other way around. Overall, the major policy implication of this study is that, foreign direct investment is more determined by infrastructural activities, market size, macroeconomic stability, and openness in long run case. Hence, in order to increase the inflow of FDI first it is very crucial to concentrate on the above economic activities. On the other hand, I found that economic growth has positive and significant effect on FDI. These suggest the decisive role of growth in stimulating investment by foreign as well as domestic investors. Hence, the current fast economic growth of the country signals a country’s economic prospects and encourages foreign investorsItem Competitiveness of Ethiopian Shoe Industry: Response to Export Market(Addis Ababa University, 2012-06) Gonfa, Birkinesh; Estiphanos, Girma (PhD)Ethiopian Leather development strategy has put the shoe industry on the forefront position to accelerate the development of the sector. The study focuses on Ethiopian shoe industry competitiveness and its export market performance. The main purpose is to find the factors that are impediments for competitiveness of shoe industry at firm level and to find out the peculiar problems of shoe manufacturing in the export activities. Concepts of competitiveness and measures have been discussed. The Porter diamond model has been chosen to analyze firm level competitiveness. The result depicts the very low status of competitiveness of the Ethiopian shoe industry. At the firm level, all the determinants of competitiveness (Factor conditions, related and support industries, firm structure, strategy and rivalry, Demand conditions) are found to be insignificant. Among the factors, related and supporting industries and factor conditions mainly limit the firms from utilizing their cost advantage to sustained market share on the domestic as well as on the international market. The study foreword some recommendation or policy implication based on the analysis. Some of the major recommendations are: on the importance of import substitution strategy in complement with the export-oriented strategy is highly magnified in the study for the sector long run development. Promoting Investment on supporting Industries are crucial in solving problems in the whole value chain of the industry. Government involvement to create access to reliable and low cost of inputs and access to finance is crucial for shoe industry competitiveness. The other important area that needs an improvement is the quality of shoe products and utilization of PMA, here the importance of firms, government and other institutions collaborate with each other to tackle the problems is very crucial to improve the competitiveness of Ethiopian shoe industry.Item The Contribution of International Air Transport to Ethiopia’s Tourism Sector(Addis Ababa University, 2015-07) Shitemaw, Kalkidan; Estiphanos, Girma (PhD)This paper examines whether there exists a relationship between tourism and air transport sectors in Ethiopia. It employs Vector Error Correction approach to assess how air transport sector contributes to tourism. It further shows the progress of the two sectors by utilizing a time series data of Ethiopia for the period 1974-2014. Impulse response and variance decomposition tests are also applied to see the interaction of tourism, air transport and economic growth in the country. The findings support the existence of relationship between the two sectors. The empirical tests further show the presence of positive and significant long run and short run relationship between tourism and air transport. Moreover the results of impulse response and variance decomposition indicate the permanent effect of air transport on tourism. The findings also point out the importance of infrastructure, economic growth, transport cost, domestic price and income of the originating country on the performance of the tourism in Ethiopia. There is also evidence that both tourism and air transport contribute to the overall growth of the economy. Thus, since the advancement in air transport leads to development of tourism both in the long run and short run, measures such as upgrading the already existing air fields, expansion of domestic airports, spreading out to new destinations and equipping the airlines with modern technology have to be considered by the authorities.Item Determinants of Current Account Balance in Ethiopia: An Autoregressive Distributed Lag Approach(Addis Ababa University, 2017-06) Fitwi, Tesfalem; Estiphanos, Girma (PhD)The purpose of this paper is to investigate the empirical linkage between current account balance of Ethiopia and macroeconomic variables based on the inter-temporal approach using recent econometric techniques from 1980 to 2015. Auto Regressive Distributed Lagged Model adopted to investigate the existence of short run and long run relationship between current account balance and set of macroeconomic variables. The model based on inter-temporal approach to current account considers current account as an inter-temporal phenomenon given that; it is the difference between domestic saving and investment. The result of the econometric analysis indicated that there is a long run relationship between current account balance and fiscal balance, real effective exchange rate, terms of trade, and Real GDP growth and statistically significant. Variable such as foreign direct investment, age dependency, financial deepening, trade openness and relative income found statistically insignificant in the long run. Among policy implication that comes out of this study is that large amount of government spending is needed in order to expand infrastructures which are supposed to increase private investment particularly for those participate in manufacturing and export sectors. In addition, devaluation of domestic currency that improves current account balance is appropriate but government should be careful in taking such measurement since it increases the cost of imported inputs and inflationary pressure on domestic price. Key words: Current account Balance, Inter-temporal approach, ARDLItem The Determinants of Export Performance in East African Countries: A Panel Data Approach(2016-05) Aman, Denekew; Estiphanos, Girma (PhD)The paper examines the effect of demand and supply side factors on East Africa countries total, agricultural raw materials, service and manufacture export performance. Thus, both internal and external aspects are responsible for poor export performance in the region. The study employed a penal data to empirically analysis these determinants in East Africa for the periods 2005 to 2014. A Sample of 7 countries from the region was selected for analyze the determinants of the exports of total, agricultural raw materials, service and manufacture based on the standard international trade classification. Based on the Hausmanestimate the total and agricultural export fixed effect model is appropriate whereas for service and manufacture export random effect model is fitted. Using the first model (fixed effect) we found that the police related to FDI and trade openness have impact on the total export performance in the region. And for model two (fixed effect) the agricultural raw materials export performance in this region is not influenced as the expected theoretical. Using random effect in the model of service sector human capital and foreign direct investment net inflow are the major factors to improve the service and manufacture sector export performance in the region. Moreover, except the agriculture raw material export the supply and demand sides’factors are found the major determinants of the total, service and manufacture export performance in the region.Item Does Real Exchange Rate Matter for Ethiopia‟s Exports? A Gravity Model Analysis(Addis Ababa University, 2011-06) Bekele, Kebede; Estiphanos, Girma (PhD)Real exchange rate is usually used as a measure of export competitiveness of a country. Despite mixed results in empirical works, its depreciation (appreciation) is supposed to stimulate (depress) exports from a particular country. This study mainly focuses on examining whether Ethiopia’s exports are determined by movements in real exchange rate. To examine this issue, the aggregate export and the exports of two main subsectors; namely, Coffee and Oilseeds are taken into consideration using bilateral exports to seventeen major trading partners over the period 2000-2009. Accordingly, a dynamic panel data gravity model that takes into account the persistent nature of trade is estimated using the system GMM estimator. Following recent approach in empirical studies, both the current and one year lagged real exchanges rates are included, where the latter is intended to account for the sluggish adjustment of trade to changes in relative prices. The results of the study show that both lagged and current real exchange rates are not in a position to exert significant effect on the bilateral exports of the country, in all the three export categories under consideration. The implication is that complementary measures are required to gain competitiveness in international market. Diversifying exports from traditional primary commodities to nontraditional price elastic export items, expanding exports destinations and giving due attention to the quality of exports are reasonable optionsItem The Economic Effects of Progressive Air Transport Liberalization in Africa: The Case of City-pair Routes to/from Addis Ababa(Addis Ababa University, 2007-07) Abera, Megersa; Estiphanos, Girma (PhD)Empirical analysis on economic effects of liberalization in the context of African air transport sector is not much discussed in the literature and the continent’s policy makers and the industry operators need such analysis to implement liberalization initiatives. As such, the purpose of this study is to empirically measure economic effects of progressive air transport liberalization in Africa by taking the case of 20 city-pair routes to/from Addis Ababa for the period 2000-2005. By employing a Two-Stage Least Square estimation procedure for a panel data set, passenger demand, fare and departure frequency models are estimated to see the impact of Bilateral Air Service Agreement (BASA) liberalization. Liberal policies are assumed to affect the two supply side variables, i.e. fare and departure frequency. Accordingly, the frequency model indicates that a significant increase in departure frequency is observed in routes that experienced both ‘full’ and ‘restricted’ type of liberalization compared to those governed by restrictive bilateral arrangements. In addition, higher increase in the number of departure frequency in routes which experienced restricted liberalization relative to those operated under fully liberalized arrangement is observed. Regarding the fare model, a statistically significant negative impact of liberalization policy on standard economy fare is not found. Finally, it is recommended that liberalizing BASAs, especially provisions pertaining to departure frequency, will enhance service quality. Key Words: Air Transport, Liberalization, Yamoussoukro Decision, Bilateral Air Service Agreements, Africa JEL Classification: L93, L51, L9Item Economic Growth, Capital Accumulation and Macro Stability in Ethiopia(Addis Ababa University, 2018-07) Ghebremedhin, Zelealem; Estiphanos, Girma (PhD)This study tries to investigate the impact of capital accumulation and macro stability on economic growth of Ethiopia taking a series of data range from 1971 to 2006. Result of co-integration test using Johanson likelihood approach indicates that all explanatory variables which are entered in the model form long-run equilibrium. The study is also conducted test for weak exogeneity and test for zero restrictions on co-integrating vectors to determine causality relationship and level of significance among equilibrium established variables. The result indicated that real GDP positively and strongly associated with physical capital, but negatively and significantly with budget deficit and political instabilities. The study could not find strong evidence which supports the existence of macro instability in the long-run other than short-run impact. The existence of war as indicator of political instability, adversely affects real GDP both in the long-run and short-run. In Ethiopia context, physical capital is found to be more important than human capital probably due to lesser human capital are accumulated in the stock.Item The Economy -wide Impact of Continental Free Trade Area (CFTA) on Ethiopia: A Recursive Dynamic Computable General Equilibrium Approach(2016-06) Hailemeskel, Begidu; Estiphanos, Girma (PhD)This study examines the economy wide impact of CFTA on Ethiopia. The analysis is made based on Ethiopian social accounting matrix (SAM) of 2009/10 constructed by EDRI. The study has utilized a recursive dynamic CGE model. The model is simulated for an import tariff reduction on different sectors using three different scenarios. The scenarios involve joining CFTA at one time, in 2016, or through phases, a 25% tariff removal each year from 2016-2019. Another scenario involves excluding strategic sectors from the CFTA. The impact of CFTA result shows, Government revenue also decreases as tariff revenue is an important source of revenue for the Ethiopian government. GDP and trade balance are, however, positively affected. The increase in GDP might be associated to the increase in disaggregated production. The larger increase in exports as compared to the increase in imports leads to an improvement in trade balance. Household consumption expenditure also increases. This might be due to the availability of cheap consumption commodities from abroad due to the removal of tariff. On the other hand, our results show a decrease in investment which might be attributed to the inability of domestic producers to compete with foreign suppliers at a lower price. Our findings also show that protection of strategic sectors benefits only producers in these sectors. Exclusion of strategic sectors from CFTA helps producers face less competition as the price of imported commodities will include tariffs. Protection of strategic sectors will also increase government revenue. The impact of protecting strategic sectors on the overall economy, however, is negative, which is it results in a decrease in GDP.Item Effectiveness of Foreign Aid in Sub-Saharan Africa: A Less Aggregated Analysis(Addis Ababa University, 2008-06) Abda, Hassen; Estiphanos, Girma (PhD)Inspired by the contradicting findings of studies on aid effectiveness and the recently emerging dissatisfaction of scholars with the methodologies of earlier works, this study has taken up the examination of the effectiveness of bilateral and multilateral aids on economic growth. To this end, the estimation technique of Difference-GMM – along with other techniques for comparison – has been applied to a panel data from 42 Sub-Saharan African countries for the years 1980 through 2007. For the data at hand, no evidence is found for the – conditional or unconditional – effectiveness of both kinds of aid. This result is robust to the alternatives of using the augmented Solow type growth models and the ‘modern’ models which emphasize the roles of institutional, policy and geographical factors at explaining growth differences. Bilateral aid on its own or in an interaction with policy is ineffective at enhancing economic growth, regardless of whether it is measured relative to the recipients GDP or in per capita terms. The same holds for multilateral aid. The concluding point of this study which says that both bilateral and multilateral aids are ineffective at influencing economic growth is confined to the data at hand and thus gives no evidence about the effectiveness of the recently emerging aid modalities. Research on aid effectiveness remains to be extended along high level of disaggregating aid and testing for the effectiveness of the new approaches of delivering aid which are argued to possess elements of better government accountability, better transparency and better recipient-ownership.Item An Empirical Analysis of the Determinants of the Current Account In Ethiopia (1961/62 - 1999/00)(Addis Ababa University, 2007-06) Tesfamariam, Gebreegziabher; Estiphanos, Girma (PhD)This study analyzes the role of fundamental macroeconomic variables in explaining the movements of the current account balance in Ethiopia and describes the trends and profiles of the current account balance and its major components in three different regimes using data covering the period 1961/62-1999/00. Current account in Ethiopia had been in a persistent deficit due to the poor performance of exports to finance the growing import bills. In estimating the model, the ADF tests for unit root show that all the variables are integrated of order one. The Johansen’s likelihood ratio test for co-integration indicates that there is one co-integration vector. The test for weak exogeneity also suggests that all the explanatory variables except capital flow are weakly exogenous, while the exogeneity test for current account balance is strongly rejected. The empirical results reveal that budget balance, broad money, relative income and terms of trade affect the current account balance significantly both in the long run and in the short run, while the effects of dependency ratio and openness are significant only in the short run. The policy implication of the findings is that reducing budget deficit, controlling monetary expansion, controlling birth rate (through family planning), achieving overall economic development, improving the diversity and quality of exports and liberalizing external trade will eliminate the persistent deficits of the Ethiopian current account balance. Key words: determination of current account, inter-temporal substitution effect, consumption smoothing effect, co-integration analysis, and error correction method.Item Evaluating the Impact of Trade Preference Scheme on Ethiopian Export Gravity Model Approach(2008-06) Tesfaye, Daniel; Estiphanos, Girma (PhD)To integrate least developed countries including Ethiopia in to international trade market, African Growth Opportunity (AGOA) and Everything But Arm (EBA) initiatives have been designed by U.S. and European countries respectively. The purpose of these initiatives is to enhance and diversify the export of the beneficiary countries. Therefore the purpose of this study is to analyze the effects of these programs on Ethiopian export. The study employs the fixed effect gravity model using panel data for the period 1974/75 -2005/06 of annual data. The main findings of the study show that AGOA has negative contribution to Ethiopian Export. This might be explained from both beneficiary (i.e. Ethiopia) and granting country's limitation. Poor infrastructure, lack of skilled manpower, poor public services, etc of Ethiopia is some of the limitation to exploit the scheme. Whereas un stability of the program, rules of origin, non tariff barriers are some of the factors that hinders the exploitation of the scheme. The result of the study also indicates that the European Union initiative has no significant effect on Ethiopian export. Like U.S. initiative this program has also its own limitations, but still Ethiopia has to identify the drawbacks in exploiting the program. The policy implication of the finding is that to exploit the program Ethiopia has to solve the drawbacks for her poor export performance. Especially she has to use export diversification strategy, i.e. the government has to peruse to diversify exportable commodities from agriculture to other products both vertically and horizontally in order to be competitive. Since most of export items relied on few primary products. In addition to this the government has to give due attention to improve social capital, skilled manpower, public services infrastructure etc. Key words: AGOA,EBA,EXPORTItem The Impact of Ethiopia’s COMESA Membership on its Exports: An Augmented Gravity Modeling Approach(Addis Ababa University, 2008-06) Mohammed, Hussien; Estiphanos, Girma (PhD)This paper attempts to assess the impact of Ethiopia’s COMESA membership on its export flows. In this regard the tobit random effects of the gravity model has been specified to annual exports of Ethiopia to twenty countries over the period 1981-2006. Accordingly, the results of the estimation show that COMESA membership has neither a significant effect of both export trade-creation and export trade-diversion on Ethiopia’s export flows. This can be interpreted as weak participation of the country within COMESA region. The empirical result also witnesses that Ethiopia tends to have highly sectoral and geographically concentrated destination of exports (a large share of its exports is destined to Europe and Asia) and consists of few primary export commodities. On the other hand; most of the traditional explanatory variables of the gravity model are the significant determinants on the flow of Ethiopia’s exports. Hence, the possible advices to the government to accelerate the growth of its exports to COMESA member countries are to diversify the economy, enhance the export competitiveness, and encourage the involvement of the private sector in the formulation and implementation of trade policy. Further study is also advised to investigate the potential pros and cons of being a full member of COMESA FTA on Ethiopia’s export flows since Ethiopia is not a member of Free Trade Area (FTA), has only done a 10 percent reduction of tariff for the goods coming from COMESA member statesItem The Impact of Real Effective Exchange Rate on Trade Balance in Ethiopia(Addis Ababa University, 2016-06) Tesema, Temesgen; Estiphanos, Girma (PhD)In the era of globalization, global macroeconomic crises and the changes in the international trade pattern have accentuated the need for clearer understanding of the factors underlying a country’s balance of trade position. In this onset, this paper examines the short run and long run effect of real effective exchange rate on trade balance of Ethiopia together with other variables that assumed to have effect on trade balance such as real GDP, government consumption, money supply and trade openness. The Autoregressive Distributed Lag (ARDL) Approach is used for analysis time serious annual data of period 1979/80 to 2013/34. Different diagnostic tests are under taken to check this time series data consistency and stability of selected model. As econometrics result reveals that these macro economic variables have short run as well as long run positive and significant effect on trade balance of the country except money supply, which has negative effect in the short run. That is in the short run real GDP , real exchange rate, government expenditure and trade openness have positive effect on trade balance of the country, while money supply has negative effects. Where as in the long run: real GDP, real effective exchange rate, money supply, government consumption and trade openness have significant and positive effect on trade balance. Based on the result I conclude that real effective exchange rate has short as well as long run effect on trade balance. To handle this series effect and reduce this continual deficit on trade balance government have to formulate strong controlling mechanism on monitory policy and trade structure of the country.Item Impact of Trade liberalization on the Government Tax Revenue of Ethiopia by Reducing the Tariff Rate: Using a Simple Computable General Equilibrium Model(Addis Ababa University, 2008-07) Berhane, Kahsay; Estiphanos, Girma (PhD)1999 was the time the military regime relinquished political power and the new government took over the power. The new government initiated a wide range of reform programme some of which are directly related to trade liberalization. In this paper a two-sector, three-goods simple Computable general Equilibrium (1-2-3 CGE) model, developed by S.Devarajan et.al. at the World Bank was used to analyze the impact of trade liberalization that is the reduction of the tariff rate in three scenarion on government tax revenue and saving of Ethiopia. Moreover, it examines the coordination of domestic tax and trade tax with out affecting the total tax revenue of the country using the 1-2-3 CGE model. The simulation result of the model when reducing tariff rate is an overall decline of the government tax revenue and government saving of the country in the three different scenarios. Furthermore, by increasing domestic tax it possible compensate the loss from tariff reduction with out affecting the total government tax revenue. Keywords: Trade liberalization, Simple Computable General Equilibrium (1-2-3CGE) Model, Government tax revenue and tariff reduction.Item Impacts of Trade Liberalization on Growth and Poverty in Ethiopia: A Dynamic Computable General Equilibrium Model(Addis Ababa University, 2007-07) Mohammed, Seid; Estiphanos, Girma (PhD)This paper presents a dynamic Computable General Equilibrium (CGE) Model for Ethiopia's trade liberalization that allows for quantification of income and welfare effects stemming from tariff reduction. This dynamic model has been built using a Social Accounting Matrix (SAM) of 1999/2000 for Ethiopia. The model is simulated for alternative policies scenarios depicting full and indiscriminating liberalization, full and discriminating liberalization, gradual and rationalized liberalization and instantaneous tariff liberalization. The main findings of these scenarios are a decline in poverty among all households in the long run. In the short run, poverty remains significantly unaffected for most of the simulations' Scenarios. The simulations' results show that static version of the model underestimates trade liberalization's impacts on production, and welfare, since it excludes the accumulation effects. However, from the alternative simulations' scenarios, instantaneous type of liberalization seems performing well in its capacity to increase real GDP, welfare, real output, and real export in the long run. This liberalization also recorded substantial decline in poverty level in the long run. Key words: Dynamic CGE Model, Trade Liberalization, Poverty, Growth, EthiopiaItem The Link between Financial Development and Economic Growth in Ethiopia(Addis Ababa University, 2012-06) Tesfaye, Roman; Estiphanos, Girma (PhD)The paper examines whether a long-run relationship between financial development and economic growth exist in Ethiopia. It employs Co-integrated Vector Autoregressive (CVAR) approach to asses how the financial sector contributes to growth. It further used the granger causality test so as to find the direction of causality between financial development and economic growth. Impulse response and variance decomposition tests are also applied so as to see the interaction between financial development and economic growth. The study utilized time-series data of Ethiopia over the period 1980-2010. The findings support the existence of a uni-directional causality from economic growth to financial development. The emperical evidence, in addition, shows the presence of positive and significant long-run relationship between financial development and economic growth and an insignificant effect in the short-run. The results of Impulse response and variance decompositions also indicate the permanent effect of financial development on economic growth. The policy implication is that long-run policies of financial development are believed to provide significant effect on economic growth.Item The Poverty Implication of Trade Liberalization in Sub-Saharan Africa Region: A Dynamic Panel General Method of Moments Analysis(Addis Ababa University, 2007-05) Bekele, Jali; Estiphanos, Girma (PhD)This thesis examines the poverty implication of trade liberalisation through its potential nexus with overall income growth and distribution. Combining results from OLS and Dynamic Panel GMM techniques due to Arellano-Bond (1991) and Blundell-Bond (1998) employed, some evidence is found from recent data that trade liberalisation is poverty reducing in SSA. Specifically, the OLS results show that the distributional consequences of trade liberalsiation are small and not significantly different from zero. However, openness to trade contributes to higher inequality in the region’s resource rich countries. Additional results obtained from the same regression include that the poor’s income is closely related with overall average income with an elasticity coefficient of around 0.8, and inflation is related with higher inequality. Thus, although the poor’s income is closely related with overall income growth, income inequality will be rising over time which could be compounded by inflation. After accounting for most of the factors relevant in determining income growth, the growth impact of trade liberalisation was also examined. The principal finding in this is that trade liberalisation in SSA positively affects income growth. Combined, the findings suggest that trade liberalisation must have played a role in the recent decline in the region’s poverty through its relation with income growth. Besides, although the structure of production in African economies is positive but not statistically different from zero, its significance could be disguised by the continued commodity demand boom African economies currently enjoy. However, the current policy on trade in SSA may not be adequate. First, openness in resource rich countries in region is associated with increasing income inequality. Secondly, the poor’s income is less than unitary elastic to overall income changes that income inequality in the region will be increasing with growth overtime. Thus, complementary measures to tackle the growing tendency for inequality overtime and encouraging other growth drivers may be necessary.Item Trade Liberalization and Patterns of Trade in Sub- Saharan Africa: A Panel Data Analysis(Addis Ababa University, 2010-05) Lachisa, Gidisa; Estiphanos, Girma (PhD)This paper examines the impact of trade liberalization on sectoral export performance of Sub-Saharan Africa countries using export supply function between the periods 1980 to 2006. The underlying base of the study is the theoretical justification that trade liberalization will lead countries to specialize and export commodities of their comparative advantage. A static panel data analysis based on fixed effect and random effect model was adopted. The main findings are while trade liberalization has a significant positive impact on manufactured export performance; its impact on primary commodity export performance is not worth mentioning. Production capacity of countries in SSA is important factor for the export performance of countries both at aggregate and disaggregate levels. The other explanatory variables are more important in explaining the manufactured export performance.