Abstract
This paper examines the impact of trade and fiscal reforms and of the 1994 devaluation of the
CFA franc on enterprise development in Chad and Gabon. These reforms provide a natural
experiment to assess the impact of trade liberalisation in countries with a small and backward
manufacturing sector. The empirical analysis is based on a new panel data base covering
virtually the whole population of manufacturing firms in Chad and Gabon, and containing data
spanning from the year before to two years after the reforms. The paper finds that although
firms’ response to changing incentives was non-negligible, with a shift of output from non
tradable to tradable and an increase in productivity, the reform process was unable to generate a
virtuous and self-sustained circle, where export expansion brings a generalized productivity
increase which in turn feeds on further export growth.