Trade liberalisation and structural adjustment programmes in sub-Saharan Africa in the late '80s were on balance supportive of exports and economic growth in the region.

However, various studies also find that while trade liberalisation has benefited Africa's export growth, it has also led to imports outpacing exports, precipitating periods of trade imbalance, particularly when commodity prices decline.This is because the region's comparative advantage lies in its natural resource wealth. By contrast, inadequate production capacity, social insecurity and poor infrastructure constrain manufacturing.These factors have driven a demand for intermediate and finished goods. The region has also faced the challenge of food insecurity amid a growing population, unfavourable weather, crop disease and poor policies.The early '80s also marked a decline in food exports as soft commodity prices plummeted. It is therefore not surprising that over the past 20 years, growth in imports has outpaced that of exports.The emergence of increased Chinese commodity demand propelled export growth from the region - specifically of raw materials. Trade between China and sub-Saharan Africa increased from 2.5% in 1994 to 23% in 2014, making it the region's largest trade partner.Although investment increased in this time, resources were channelled to the extractive sectors rather than manufacturing. Worryingly, African trade with China has been asymmetrical. China has demanded industrial metals, oil and precious metals, while sub-Saharan Africa has imported cheap intermediate and final goods from China.The commodity super-cycle of the 2000s presented an opportunity for the region to diversify its economies as high commodity prices yielded impressive growth rates. From 2000 to 2011, growth in the region averaged 5.7%. This was notably higher than the 4% global growth.However, the turn of the cycle late in 2011 revealed the fragility of commodity-dependent countries. This has resulted in a significant slowdown in economic growth - specifically over the past year - and the deepest deterioration in the terms of trade since the '80s.Nigeria, Angola and Zambia are prime examples of economies reeling from declining commodity prices, which has been worsened by inadequate policy responses. Instead of the diversification or rebalancing of these economies, high oil and copper prices incentivised further investment in the oil and mining sectors in Nigeria and Zambia. Due to underinvestment in oil refineries, Nigeria remains highly dependent on imports of refined petroleum.Granted, there has been some diversification in these economies. Nigeria's services sector accounts for over 50% of GDP, while oil contributes less than 10% to GDP growth. However, just asin Angola and Zambia (copper in their case), oil in Nigeria accounts for over 90% of export earnings and 70% of state revenue.A lot has to be done, but correct policy responses will move the region in the right direction. Infrastructure development has increased significantly, giving an opportunity to boost the industrial sector. A very young population versus an ageing Asian population, inexpensive labour and competitive exchange rates could all contribute to greater manufacturing.Granted, manufacturing in Africa accounts for a small percentage of GDP, but there is some indication that it is growing. Bilateral trade has helped boost intermediate goods.Furthermore, there is increasing evidence of export sophistication, associated with increased productivity. In Kenya and Ethiopia, exports of cut flowers and other horticultural products that require sophisticated technology and modern services are an indication of export advancement typically observed in a high-income country.Exports of modern services, such as business processing in Ghana, are increasing. While still in the nascent phase, the region's exports are moving up the value chain. The short-term trade outlook is uninspiring, but there are promising signs in the long term.Nxedlana is FNB's chief economist..