41. The need for the diversification of African commodity exports is great and there is also scope for diversification if certain conditions are met.

Such consideration, taken along with subregional collaboration, will widen the scope for commodity diversification.

However, in general, the scope for the diversification of exports will depend to a large extent on the possibilities of diversifying production.

The need for raising export earnings in SIDS which are typically import dependent because of their limited scope for economic diversification does not need elaboration.

V. POTENTIAL FOR DIVERSIFICATION

IV. THE CASE FOR DIVERSIFICATION

However, given the diversity in the scope for diversification among LDCs, the reality of diminishing exposure of LDC economies to the risk of erosion is uneven.

III. INSTITUTIONAL FRAMEWORK FOR COMMODITY DIVERSIFICATION

Diversification can be for increased exports, including to regional markets as well as for meeting domestic requirements. Export diversification usually involves production diversification, for which there is considerable potential in Africa.

The establishment of a diversification fund, however, would, along with the proposed national diversification councils, provide the focal point for enhancing diversification efforts in Africa.

V. POTENTIAL FOR DIVERSIFICATION . 29 40 16

VII. RESOURCES FOR DIVERSIFICATION, INCLUDING EXTERNAL SUPPORT

Diversification facility for the African commodity sector

Diversification facility for Africa apos s commodities

Diversification

IV. THE CASE FOR DIVERSIFICATION . 24 28 14

VIII. PROPOSED APPROACH TOWARDS A FUND FOR DIVERSIFICATION

A DIVERSIFICATION FUND FOR AFRICA apos S COMMODITIES

Scope for local purchase

Section VIII sets out the proposed approach involving a diversification facility for African commodities, as well as national diversification councils.

51. While the need for increased external assistance for diversification is recognized, it does not necessarily call for the establishment of a new organization for a fund for diversification.

(v) The need for diversification in Africa is compelling.

quot The need for diversification in Africa is compelling.

6350 Import diversification

National diversification councils

National diversification councils

VII. RESOURCES FOR DIVERSIFICATION, INCLUDING EXTERNAL SUPPORT . 45 50 22

the establishment of a diversification fund for Africa apos s

IV. A STREAMLINED PROPOSAL FOR A DIVERSIFICATION FACILITY FOR AFRICA apos S COMMODITIES

22. The extent to which the African countries would benefit from commodity diversification, particularly horizontal diversification, will depend on the situation in the world market for commodities and the trend in diversification in other countries.

(c) Client diversification and

II. DIVERSIFICATION WHICH WAY?

C. National diversification councils

1. Diversification of exports

Studies on scope for venture capital

Building industrial and modern service sectors is critical for successful diversification.

The diversification councils could provide a vehicle for fostering this partnership.

There is much greater scope for fiscal stimulus to boost growth, and much smaller scope for monetary stimulus.

(vi) Diversification can involve horizontal diversification into new commodities, vertical diversification whereby value is added to existing commodities, and the development of new end uses.

Smallness of territory and population makes for small economies lacking in diversification.

42. There is still scope for improvement.

42. There is still scope for improvement.

5.2 Diversification of intervention options

30. Diversification has three dimensions.

Location of the diversification facility