Chapter I: Introduction
1.1 Introduction
Historically, Sub-Saharan Africa (SSA) is seen as supplier of raw materials, and countries’ economies have continued to produce primarily crop for export. These countries have comparative advantage in exporting agricultural commodities due to the low cost of labor, the availability of natural resources and tropical climate. Thus, agriculture is still the most important single activity for the SSA countries, engages almost 80% of the population; contributes on average of 30%-60% of the Gross Domestic Product (GDP) and about 30% of the export earnings Bruntrup et al. (2009). Both industry and services are dependent on the performance of agriculture, which provides raw materials, generates foreign currency for the import of essential inputs and food for the fast growing population. Among the tropical agricultural commodities exported by SSA countries, sesame seed represents an important export product. The seed is widely cultivated across the world; however, it constitutes a major export crop for West and East African countries where the seed is voluminously produced. The major producers of sesame seed in Africa are Tanzania, Sudan, Nigeria, Ethiopia and Burkina Faso (BFA).
Their production represents 57% worldwide. The growing demand in the world market for sesame seed and the available capacity to expand production could make sesame seed sector ultimately turn into one of engines of economic growth of African producing countries.
1.2 Background and Motivations
As many other SSA countries, trade liberalization policies were instituted in 1980s in BFA. The persistent decline in economic growth recorded in post mid-1960s led to the
implementation of trade policy reforms to salvage the economy from collapse.
Specifically, BFA implemented the SAP in 1983, which aimed to reposition the economy on the path of desired economic growth. The trade reform in 1983 and its fortification in 2000 by the SFCP, and the adoption of the AGSDS later in 2011 resulted principally in reducing poverty, sustaining the economic growth and diversifying the agricultural sector.
Moreover, the principal vision of the current economic program of BFA (NPESD) is still to promote export-led growth through agriculture and to enhance its international competitiveness.
Yet, agriculture remains an important sector of BFA economy and contributes between 35% and 40% of the GDP. The sector engages 80% of the population and is the backbone of economic growth, poverty reduction and sustainable development.
Agricultural exports are cotton, livestock products, groundnuts, sesame seed, green beans, shea butter, and fruits among others. In 2016, total exports value of BFA was worth of 2.4 billion USD (20% of GDP), with 37.5% attributed to total agricultural exports (UN Comtrade data). Cotton industry, the first and the biggest industry, alone contributes to 60% to agricultural export earnings. However, the cotton sector is facing many serious difficulties caused by the downward pressure on world prices and internal problems, which partly led farmers to switch in other cash crops production. After the cotton, sesame is considered as the second major cash crop for export in BFA, and the country is one of the world largest producer and exporter. Sesame in BFA is grown entirely under rainfed conditions with little or no use of machinery or modern inputs under the traditional farming system. The seed is cultivated throughout the country but the major growing areas are located in western, central and eastern regions.
The sesame sector is relatively young in BFA, and over the past decade, the sector has been characterized by a tremendous growth caused by the increasing world demand.
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The demand principally comes from the oil industry and the confectionary sector.
However, recently the sesame oil is not only for human consumption (cooking), but is also used in cosmetic products (soaps paints, perfumes...), pharmaceuticals, and insecticides. These have induced a surplus of demand for the sesame seed worldwide.
Consequently, the increasing world demand of sesame seed induced significant variations in BFA’s sesame sector both in production and in exports. Sesame seed is a cash crop and the country exports nearly 80% of its production. According to FAO database total export quantity increased from 20,600 tons in 2007 to 160,000 tons in 2016 (average growth of 22.75% per annual). In terms of value, sesame seed exports value maintained an average growth of 18.5% per year over the decade (2007-2016) and export earnings reached 103 billion FCFA (170 million USD) in 2015. BFA’s export markets for sesame are quite concentrated in Asia such as Japan, Singapore, China and South Korea. Within Africa, BFA’s performance in the sesame sector (growth in terms of export quantities and value) compared to its major competitors (Nigeria, Ethiopia, Tanzania, Sudan) is unequaled.
With nearly 10% in world total export of sesame and with an unequaled performance, BFA ranked eighth and fifth as world and Africa largest exporter of sesame seed in 2016 respectively (FAO database).
Further, according to the Households’ Survey on Living Conditions in BFA, carried out in 2003 by INSD it indicated that sesame contributes on average of 1.4% to the household’s (farmers) monetary income with a different importance according to the region. This statistic has certainly evolved over the years; however, it points out both the impact that sesame seed export could have in boosting farmers’ income, reducing poverty in the rural sector and sustaining the economy growth. Table 1 below shows sesame exports quantities, values, and share during the period 2012-2016. Sesame exports in 2012-2016 accounted for about 21% of agricultural exports and about 6% of total export,
on average. In addition, the logCEP1 for the sesame sector is greater than one, which highlights the competitiveness of the country in exporting sesame. Sesame exports are becoming source of agricultural exports diversification, an emerging economic sector;
and one of the leading export commodities in BFA since the cotton sector is facing many difficulties. Despite the double-digit contribution of sesame exports to the earnings of agricultural exports and its impacts on farmers’ income, there has been no study conducted to investigate the factors that determine sesame exports in the country. It turs out to be relevant to ask these questions are: what are the factors that determine sesame seed exports in BFA? , and what can be done to enhance the earnings of sesame exports for BFA? Concisely, this study intends to answer these questions.
Table 1. Sesame export quantities and values of BFA (2012-2016) Years Quantity
1 CEP: Comparative Export Performance =
XiA: value of world exports of sesame seed, XiB: value of sesame seed exports from BFA, XB: total value of agricultural exports from BFA, XA: total value of world agricultural exports
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