Fiscal policy pro-cyclicality in Sub-Saharan African countries: The role of export concentration

Sub-Saharan Africa's exports remain dominated by primary commodities, and the need to diversify their production and export base appears as a matter of urgency. This paper investigates the impact of exports concentration on fiscal pro-cyclicality in sub-Saharan Africa. The concentration of exports limits the sources of revenues for governments and restrains the fiscal room for maneuver. Using a sample of 40 countries over the period 1995-2015, we find that export concentration increases the degree of fiscal policy pro-cyclicality, and this result is driven by the behavior of public investment. Our findings highlight the importance of diversifying exports in order to widen the range of revenue sources for governments and pave the way of countercyclical public investment capable of generating sustainable growth.