Abstract
The chapter analyzes the impact of trade facilitation on bilateral trade flows within sub-Saharan Africa to help appreciate the need to formulate and implement trade facilitation policies to promote the integration of developing countries into the global trading system and international markets. The study employs country-specific data for business environment, information and communication technology, port efficiency and infrastructure for 29 countries over the period (2004–2014). Using an augmented gravity model, findings from the study show that a well-regulated business environment is vital for African countries to fully gain from other trade facilitation measures. It also provides evidence of the marginal effect of air transport as an alternative means to move goods across borders. The study also highlights the need for government and policymakers to prioritize ICT as it significantly expands trade particularly with regards to the contribution of the private businesses investment in ICT. The inclusion of zero trade flows in the analysis also brings to light the need for African countries to ensure governments are accountable in all aspects of their dealings by adopting strategies that would ensure a well-regulated business environment. The results reveal the essence of appropriate checks and verification procedures at ports and other revenue collection posts to control for inefficiencies in the system particularly corruption. Finally, it provides evidence indicating that enhanced port efficiency has a positive effect on trade volumes, especially with custom clearance procedures and the ease at which competitively priced shipments could be arranged for transport. Recommendations emanating from findings of the study indicate that improvement in infrastructure quality will bring huge benefits in terms of intra-regional trade. The essence of the study is to provide useful information to guide policymakers in formulating and implementing policies targeted at improving these trade indicators to promote bilateral trade among SSA countries.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Ackah C, Turkson FE, Opoku K (2012) Trade costs and intra-regional trade flows in ECOWAS. J W Afr Integr JWAI 1(1):1–35, EPAU, ECOWAS
Akinkugbe O (2009) Trade facilitation and Africa’s manufactured goods’ export: a panel data analysis. J Dev Areas 42(2): 77–88
Anderson JE, Van Wincoop E (2003). Gravity with gravitas: a solution to the border puzzle. Am Econ Rev 93(1): 170–192
Baldwin R, Taglioni D (2006) Gravity for dummies and dummies for gravity equations (No. w12516). National Bureau of Economic Research
Buys P, Deichmann U, Wheeler, D (2006) Road network upgrading and overland trade expansion in Sub-Saharan Africa, vol. 4097. World Bank
Djankov, S, Freund, C, Pham, CS (2010) Trading on time. Rev Econ Stat 92(1): 166–173
Draper P (2013) The shifting geography of Global Value Chains: Implications for developing countries, trade policy, and the G20. Glob Summitry J 1(1): 1–40
Hausman JA (1978) Specification tests in econometrics. Econ: J Econ Soc 46(6): 1251–1271
Head K (2003) Gravity for Beginners, Material presented at Rethinking the Line: The Canada-U.S. Border Conference. Vancouver, University of British-Columbia
Helpman E, Melitz M, Rubinstein Y (2008) Trading partners and trade volumes. Q J Econ 123: 441–487
Hummels D (2007) Transportation costs and international trade in the second era of globalization. J Econ Perspect 21(3): 131–154
Hummels D, Lugovskyy V (2006) Are matched partner trade statistics a usable measure of transportation costs? Rev Int Econ 14(1): 69–86
Hummels D, Skiba A (2004) Shipping the Good Apples Out. J Polit Econ 112(6): 1384–1402
Kien NT (2009) Gravity model by panel data approach: an empirical application with implications for the ASEAN free trade area. ASEAN Econ Bull 26(3): 266–277
Limao N, Venables AJ (2001) Infrastructure, geographical disadvantage, transport costs and trade. World Bank Econ Rev 15: 451–479
Lisinge RT, & United Nations. Economic Commission for Africa; United Nations. Economic Commission for Africa. African Trade Policy Centre. (2004). Trade Facilitation to Integrate Africa into the World Economy. African Trade Policy Centre: Work in Progress (4)
MacKellar L, Wörgötter A, Wörz J (2002) Economic growth of landlocked countries. In Ökonomie in Theorie und Praxis. Springer, New York, pp 213–226
Portugal-Perez A, Wilson JS (2012) Export performance and trade facilitation reform: Hard and soft infrastructure. World Dev 40(7): 1295–1307
Rose AK, Van Wincoop E (2001) National money as a barrier to international trade: The real case for currency union. Am Econ Rev 91(2): 386–390
Silva JS, Tenreyro S (2006) The log of gravity. Am Econ Rev 88(4): 641–658
Tinbergen J (1962) Shaping the world economy; suggestions for an international economic policy. Books (Jan Tinbergen)
Turkson FE (2011) Logistics and bilateral exports in developing countries: a multiplicative form estimation of the logistics augmented gravity equation. CREDIT Research Paper No. 11/06
Turkson FE (2012) Trade agreements and bilateral trade in Sub-Saharan Africa (SSA). CREDIT Research Paper (12/07)
Westerlund J, Wilhelmsson F (2006) Estimating the gravity model without gravity using panel data. Appl Econ 7(9): 1466–4283
Wilson JS, Mann CL, Olsuki T (2003) Trade facilitation and economic development: a new approach to quantifying the impact. World Bank Econ Rev 17(3): 367–389
Wilson JS, Mann CL, Otsuki T (2005) Assessing the benefits of trade facilitation: a global perspective. World Econ 28(6): 841–871
World Bank, World Development Indicators (2015)
Yang D (2008) Integrity for hire: an analysis of a widespread customs reform. J Law Econ 51(1): 25–57
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Appendix
Appendix
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Turkson, F.E., Adjei, R.M., Barimah, A. (2020). Does Trade Facilitation Promote Bilateral Trade in Sub-Saharan Africa? Policy and Issues. In: Odularu, G., Hassan, M., Babatunde, M. (eds) Fostering Trade in Africa. Advances in African Economic, Social and Political Development. Springer, Cham. https://doi.org/10.1007/978-3-030-36632-2_4
Download citation
DOI: https://doi.org/10.1007/978-3-030-36632-2_4
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-36631-5
Online ISBN: 978-3-030-36632-2
eBook Packages: Economics and FinanceEconomics and Finance (R0)