## Competition, Competitiveness and Growth in Sub-Saharan Africa

_IMF Working Papers, February 14, 2020_

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**Canonical URL:** [Competition, Competitiveness and Growth in Sub-Saharan Africa](https://www.imf.org/en/publications/wp/issues/2020/02/14/competition-competitiveness-and-growth-in-sub-saharan-africa-49019)

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## Bibliographic details
- Authors: Reda Cherif, Sandesh Dhungana, Xiangming Fang, Jesus R Gonzalez-Garcia, Yuanchen Yang, Mustafa Yenice, Jung Eun Yoon
- Published: February 14, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513526379.001

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### Research question and data
- Research question: Does greater product market competition improve external competitiveness and growth?
- Data: country- and firm-level data for a sample of 39 sub-Saharan African countries over 2000–17, as well as other emerging market economies and developing countries.
- Authors: Reda Cherif, Sandesh Dhungana, Xiangming Fang, Jesus R Gonzalez-Garcia, Yuanchen Yang, Mustafa Yenice, Jung Eun Yoon.
- Publication date: February 14, 2020.
- Publication details:
  - Series: Working Paper No. 2020/030
  - Issue: 030
  - Pages: 48
  - DOI: https://doi.org/10.5089/9781513526379.001
  - ISBN: 9781513526379
  - ISSN: 1018-5941

### Key empirical findings
- Growth and competitiveness
  - An improvement in domestic competition is associated with a signficant increase in real GDP per capita growth rate.
  - The growth effect is achieved mainly through an improvement in export competitiveness and productivity growth.
- Prices
  - Price levels, including of essential items, are generally lowered with an increase in competition.
- Firm-level effects
  - Greater competition—proxied through a decline in corporate market power—is associated with an increase in firms’ investment and the labor’s share in output.
  - These firm-level effects are more pronounced in the manufacturing sector and among domestic firms compared to foreign firms.

### Policy-relevant implications
- Enhancing domestic product market competition can be a channel to raise real GDP per capita growth, primarily via export competitiveness and productivity gains.
- Policies that reduce corporate market power may increase firm investment and the labor share, supporting broader-based growth.
- Competition-enhancing reforms may also help lower price levels for essential items, with potential distributional benefits.

### Thematic subjects and keywords
- Subject: Commodity markets, Competition, Emerging and frontier financial markets, Financial markets, Labor, Labor share, Production, Productivity
- Keywords: Africa, Commodity markets, Competition, competition indicator, cost minimization problem, Emerging and frontier financial markets, enterprise data, firm Dynamics, firm markup, firm profitability, firm-level indicators, Global, Labor share, Market Power, Markups, Productivity, Sub-Saharan Africa, WP

*Source: IMF Working Paper "Competition, Competitiveness and Growth in Sub-Saharan Africa", February 14, 2020; Working Paper No. 2020/030.*

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_Source: https://www.imf.org/en/publications/wp/issues/2020/02/14/competition-competitiveness-and-growth-in-sub-saharan-africa-49019_