What Constrains Africa's Exports

Africa's share of global exports has dropped by 50 percent over the last three decades. To stem this decline, aid for trade to the region has increased rapidly in recent years. Assistance can target improvements in three important components of trade facilitation: transit times, documentation,...

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Bibliographic Details
Published in:	The World Bank economic review 2011-01, Vol.25 (3), p.361-386
Main Authors:	Freund, Caroline, Rocha, Nadia
Format:	Article
Language:	eng
Subjects:	Africa Coefficients congestion crossing Economic assistance Economic policy Empirical research Export performance Export-import trade Exporters Exports Foreign aid freight Geography inspection International trade port authorities Ports Public transportation River ports road road conditions road quality roads route safety Studies Tariff Tariffs Trade traffic transit Transport transportation Travel travel distance travel distances travel time travel times vehicles World Bank
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Summary:	Africa's share of global exports has dropped by 50 percent over the last three decades. To stem this decline, aid for trade to the region has increased rapidly in recent years. Assistance can target improvements in three important components of trade facilitation: transit times, documentation, and ports and customs. Of these, transit delays have the most economically and statistically significant effect on exports. Specifically, a one day reduction in inland travel times leads to a 7 percent increase in exports, after controlling for the standard determinants of trade and potential endogeneity. Put another way, a one day reduction in inland travel times translates into a 2 percentage point decrease in all importing-country tariffs. By contrast, longer delays in the other areas have a far smaller impact on trade. Large transit delays are relatively more harmful because they are associated with high (within-country) variation, making delivery targets difficult to meet. Finally, the results imply that transit times are primarily about institutional features—such as border delays, road quality, fleet class and competition and security—and not geography.
ISSN:	0258-6770 1564-698X 1564-698X