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Seaport efficiency, port throughput, and economic growth in Africa

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Maritime Economics & Logistics Aims and scope

Abstract

This paper examines the impact of seaborne trade on economic growth, from a port throughput and seaport efficiency perspective. We study the impact of port throughput on economic growth and the role seaport efficiency plays in that relationship. The paper uses panel data on 28 African countries with seaports, over the period 2010 to 2018, and we employ the system generalized method of moments approach for the analysis. We establish a direct significant positive effect of seaport efficiency and port throughput on economic growth in Africa. Specifically, a 1% increase in seaport efficiency (port throughput) improves economic growth between 0.014 and 0.038% (0.028% and 0.043%). We further show that improvement in seaport efficiency is vital for port throughput, to have its greater effect on economic growth in the Continent. Finally, regarding the other explanatory variables that influence economic growth, our findings reveal that, government spending, inflation, domestic investment, trade, financial development, and institutional quality are important determinants of economic growth in Africa. Based on these findings, we recommend port policies that promote seaport efficiency in Africa.

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Notes

  1. According to the World Economic Situation Prospect [WESP] (2020) report, Africa remains a continent that faces enormous difficulties in achieving sustained growth, relevant to enhancing living standards of the populace.

  2. The principal component analysis is used for creating different variables that are a linear composite of the primary ones (Sakyi et al., 2017; Chen and Woo, 2010).

  3. Following Chen and Woo (2010) institutional quality index is computed by the formula.

    \(\frac{{\sum }_{i=1}^{p}{\beta }_{i}{PC}_{I}}{{\sum }_{I=1}^{P}{\beta }_{I}}\) where \({\beta }_{i}(i=1,\dots ,p)\) denotes the \(ith\) eigenvalue and \({PC}_{i}\) the \(ith\) principal component selected based on the Kaiser Criterion.

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Acknowledgements

This work was supported by the Volkswagen Foundation, Germany, within its Postdoctoral Fellowship Program in sub-Saharan Africa [Grant No.: 94665]. No potential conflict of interest was reported by the authors.

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Authors and Affiliations

  1. Department of Economics, Kwame Nkrumah University of Science & Technology, Kumasi, Ghana

    Enock Kojo Ayesu & Daniel Sakyi

  2. Economics Department, University of Lethbridge, Lethbridge, Canada

    Alexander Bilson Darku

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  1. Enock Kojo Ayesu
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Correspondence to Enock Kojo Ayesu.

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Appendix

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Table 7 List of sampled African countries with seaports
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Ayesu, E.K., Sakyi, D. & Darku, A.B. Seaport efficiency, port throughput, and economic growth in Africa. Marit Econ Logist 25, 479–498 (2023). https://doi.org/10.1057/s41278-022-00252-8

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