Skip to main content Accessibility help

Why trade facilitation matters to Africa1



Mitigating the impact of the economic crisis will require using all the tools necessary to regain a sustainable path to growth. This includes measures to support trade expansion, including in developing countries, such as those in Africa. This paper provides context for understanding why trade facilitation and lowering trade costs matter to Africa both today and over the long term. Trade costs are higher in Africa than in other regions. Using gravity-model estimates, the authors compute ad-valorem equivalents of improvements in trade indicators for a sample of African countries. The evidence suggests that the gains for African exporters from cutting trade costs half-way to the level of Mauritius has a greater effect on trade flows than a substantial cut in tariff barriers. As an example, improving logistics so that Ethiopia cuts its costs of trading a standardized container of goods half-way to the level in Mauritius would be roughly equivalent to a 7.6% cut in tariffs faced by Ethiopian exporters across all importers.


Corresponding author


Hide All

This paper was originally prepared for the workshop on ‘Trade Costs and the Business Environment: A Focus on Africa’, African Economic Research Consortium and the World Bank, Entebbe, Uganda, 31 May 2008. The views expressed here are entirely those of the authors; they do not necessarily represent those of the World Bank, its Executive Directors, or the countries they represent. The authors thank Bernard Hoekman and two anonymous referees for valuable suggestions and comments on an earlier version, Alessandro Nicita for providing data, and Daniel Reyes for research assistance. We also thank Ben Taylor and Michelle Chester for their assistance in final preparation of this paper.



Hide All
Amjadi, A. and Yeats, A. (1999), ‘Have Transport Costs Contributed to the Relative Decline of Sub-Saharan African Exports?’, Policy Research Working Paper Series 1559, World Bank, Washington, DC.
Anderson, James E. and Marcouiller, Douglas (2002), ‘Insecurity and the Pattern of Trade: An Empirical Investigation’, Review of Economics and Statistics, 84(2): 342352.
Anderson, James E. and Neary, Peter (1994), ‘Measuring the Restrictiveness of Trade Policy’, World Bank Economic Review, 8(2): 151169.
Anderson, James E. and van Wincoop, Eric (2003), ‘Gravity with Gravitas: A Solution to the Border Puzzle’, American Economic Review, 93: 170192.
Anderson, James E. and van Wincoop, Eric (2004), ‘Trade Costs’, Journal of Economic Literature, 42(3): 691751.
Arvis, J.-F., Raballand, G., and Marteau, J.-F. (2007), ‘The Cost of Being Landlocked: Logistics Costs and Supply Chain Reliability’, Policy Research Paper WPS 4258, World Bank, Washington, DC.
Balat, J., Brambilla, I., and Porto, G. (2008), ‘Realizing the Gains from Trade: Export Crops, Marketing Costs, and Poverty’, World Bank Policy Research Paper 4488, World Bank, Washington, DC.
Balchin, P. and Edwards, S. (2008), ‘Trade-Related Business Climate and Manufacturing Export Performance in Africa: A Firm Level Analysis’, mimeo,
Brenton, Paul and Hoppe, Mombert (2007), ‘Clothing and Export Diversification: Still a Route to Growth for Low-Income Countries?’, Policy Research Working Paper 4343, World Bank, Washington, DC.
Broadman, Harry (2007), ‘Africa's Silk Road: China and India's New Economic Frontier’, World Bank, Washington, DC.
Buys, Piet, Deichmann, Uwe, and Wheeler, David (2006), ‘Road Network Upgrading and Overland Trade Expansion in Sub-Saharan Africa’, Policy Research Working Paper No. 4097, World Bank, Washington, DC.
Cadot, Oliver, de Melo, Jaime, and Portugal-Perez, Alberto (2007), ‘Rules of Origin for Preferential Trading Arrangements: Implications for the ASEAN Free Trade Area of EU and US Experience’, Journal of Economic Integration, 22(2): 288319.
Cadot, Oliver and de Melo, Jaime (2008), ‘Why OECD Countries Should Reform Rules of Origin’, The World Bank Research Observer, 23(1): 77105.
Collier, P. and Gunning, J. W. (1999), ‘Explaining African Economic Performance’, Journal of Economic Literature, 37(March): 64111.
Czubala, Witold, Shepherd, Ben, and Wilson, John S. (2007), ‘Help or Hindrance? The Impact of Harmonized Standards on African Exports’, Policy Research Working Paper 4400, World Bank, Washington, DC.
de Melo, Jaime and Portugal-Perez, Alberto (2008), ‘Rules of Origin, Preferences and Diversification in Apparel: African Exports to the US and to the EU’, CEPR Discussion Paper No. 7072.
Deardorff, Alan V. (1998), ‘Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?’, in Frankel, J. A. (ed.), The Regionalization of the World Economy, Chicago: University of Chicago Press.
Disdier, Anne-Célia, Fontagné, Lionel, and Mimouni, Mondher (2007), ‘The Impact of Regulations on Agricultural Trade: Evidence from SPS and TBT Agreements’, Working Paper No. 2007–04, CEPII.
Djankov, Simeon, Freund, Caroline, and Pham, Cong S. (2009), ‘Trading on Time’, Review of Economics and Statistics, forthcoming.
Dutt, P. and Traca, D. (2007), ‘Corruption and Bilateral Trade Flows: Extortion or Evasion?’, mimeo, NSEAD – Economics and Political Sciences and Universite Libre de Bruxelles – Solvay Business School.
Eaton, J. and Kortum, S. (2002), ‘Technology, Geography, and Trade’, Econometrica, 70: 17411779.
Eaton, J. and Tamura, A. (1994), ‘Bilateralism and Regionalism in Japanese and US Trade and Direct Foreign Investment Patterns’, Journal of the Japanese and International Economies, 8(4): 478510.
Faye, M. L., McArthur, J. W., Sachs, J. D., and Snow, T. (2004), ‘The Challenges Facing Landlocked Developing Countries’, Journal of Human Development, 5(1): 3168.
Fisman, Raymond and Wei, Shang-Jin (2004), ‘Tax Rates and Tax Evasion: Evidence from “Missing Imports” in China’, Journal of Political Economy, 112(2, April): 471500.
Francois, Joseph and Manchin, Miriam (2007), ‘Institutions, Infrastructure, and Trade’, Policy Research Working Paper No. 4152, World Bank, Washington, DC.
Freund, Caroline, and Weinhold, Diana (2004), ‘The Effect of the Internet on International Trade’, Journal of International Economics, 62(1): 171189.
Gatti, Roberta (2004), ‘Explaining Corruption: Are Open Countries Less Corrupt?’, Journal of International Development, 16: 851861.
Helble, Matthias, Shepherd, Ben, and Wilson, John S. (2007), Transparency and Trade Facilitation in the Asia Pacific: Estimating the Gains from Reform, Washington, DC: World Bank.
Helpman, Elhanan and Krugman, Paul R. (1985), Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy, Cambridge, MA: MIT Press.
Helpman, Elhanan, Melitz, Marc, and Rubinstein, Yona (2008), ‘Estimating Trade Flows: Trading Partners and Trading Volumes’, The Quarterly Journal of Economics, 123(2): 441487.
Hoekman, Bernard and Nicita, Alessandro (2008), ‘Trade Policy, Trade Costs, and Developing Country Trade’, Policy Research Working Paper No. 4797, World Bank, Washington, DC.
Hummels, David (1999), ‘Have International Transport Costs Declined?’, mimeo, July, University of Chicago.
Hummels, David (2006), ‘Transport Costs and Trade over Time’, in OECD Report of the One Hundred and Thirtieth Round Table on Transport, Round Table 130, Transport and International Trade.
Hummels, David and Skiba, Alexandre (2004), ‘Shipping the Good Apples Out: An Empirical Confirmation of the Alchian-Allen Conjecture’, Journal of Political Economy, 112: 13841402.
Kee, Hiau Looi, Nicita, Alessandro, and Olarreaga, Marcelo (2009), ‘Estimating Trade Restrictiveness Indices’, Economic Journal, 119(534): 172199.
Limao, Nuno and Venables, Anthony J. (2000), ‘Infrastructure, Geographical Disadvantage, Transport Costs, and Trade’, World Bank Economic Review, 15(3): 451479.
Martin, Will and Pham, C. (2008), ‘Estimating the Gravity Model When Zero Trade Flows are Important’, mimeo, World Bank.
Moenius, Johannes (2004), ‘Information Versus Product Adaptation: The Role of Standards in Trade’, International Business and Markets Research Center Working Paper, Northwestern University.
Negri, T. and Porto, A. (2008), ‘Burley Tobacco Clubs in Malawi: No Market Institutions for Exports’, Policy Research Working Paper No. 4561, World Bank, Washington, DC.
Ng, Francis and Yeats, Alexander (1996), ‘Open Economies Work Better! Did Africa's Protectionist Policies Cause Its Marginalization in World Trade?’, World Development, 25(6): 889904.
Njinkeu, Dominique, Wilson, John S., and Fosso, Bruno Powo (2008), ‘Intra-Africa Trade Constraints: The Impact of Trade Facilitation’, mimeo, World Bank.
Otsuki, Tsunehiro, Wilson, John S., and Sewadeh, Mirvat (2001), ‘What Price Precaution? European Harmonization of Aflatoxin Regulations and African Groundnut Exports’, European Review of Agricultural Economics, 28(3): 263284.
Porto, Guido (2008), ‘Agro-manufactured Export Prices, Wages and Unemployment’, Policy Research Working Paper Series 4489, World Bank, Washington, DC.
Portugal-Perez, Alberto (2008), ‘The Costs of Rules of Origin in Apparel: African Preferential Exports to the US and to the EU’, Policy Issues in International Trade and Commodities, Study Series No. 39, UNCTAD.
Raballand, G., Kunaka, C., and Giersing, B. (2008), ‘The Impact of Regional liberalization and Harmonization in Road Transport Services: A Focus on Zambia and Lessons for Landlocked Countries’, Policy Research Working Paper No. 3840, World Bank, Washington, DC.
Santos Silva, J. and Tenreyro, S. (2006), ‘The Log of Gravity’, The Review of Economics and Statistics, 88: 361365.
Teravaninthorn, Supee and Raballand, Gael (2008), Transport Prices and Costs in Africa: A Review of the Main International Corridors, Washington, DC: World Bank.
Wilson, John S., Mann, Catherine, and Otsuki, Tsunehiro (2003), ‘Trade Facilitation and Economic Development: A New Approach to Measuring the Impact’, World Bank Economic Review, 17(3): 367389.
Wilson, John S. and Otsuki, Tsunehiro (2004), ‘Standards and Technical Regulations and Firms in Developing Countries: New Evidence from a World Bank Technical Barriers to Trade Survey’, mimeo,
Wilson, John S., Portugal-Perez, Alberto, and Taylor, Ben (2009), ‘South Africa: The Gains to Trade Facilitation, mimeo.
World Bank (2008), ‘Doing Business database’, available at
World Bank (2008), ‘Global Monitoring Report 2008.
Yeats, Alexander, (1990a), ‘On the Accuracy of Economic Observations: Do Sub-Saharan Trade Statistics Mean Anything?’, The World Bank Economic Review, 4(2).
Yeats, Alexander, (1990b), ‘Do African Countries Pay More for Imports? Yes’, The World Bank Economic Review, 4(1): 120.

Related content

Powered by UNSILO

Why trade facilitation matters to Africa1



Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed.