TRADE FACILITATION AND AFRICA'S MANUFACTURED GOODS' EXPORT: A PANEL DATA ANALYSIS

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					       TRADE FACILITATION AND AFRICA’S
        MANUFACTURED GOODS’ EXPORT:
           A PANEL DATA ANALYSIS
                                     Oluyele Akinkugbe
                              University of Botswana, Botswana


ABSTRACT

This paper examines how issues of trade facilitation continue to discourage the export of
manufactured goods from Africa. Pooled, cross-country, annual time series data for the period
1995 – 2004 for 20 African countries were used to examine nature of the relationship between
some selected indicators of trade facilitation—Corruption perception index, roads network,
number of start-up procedures for register a business, taxes on exports—and export of
manufactured goods. Our conclusions are that policy-regime improvements and conscious efforts
at removing all forms of constraints to the free flow of goods could have a significant impact on
goods exports from Africa. Our recommendations are that governments in the different African
countries will need to focus on ways of achieving acceptable standards and best practices in terms
of facilitating trade expansion. Reform policies have to be targeted at these indicators so as to be
more engaged in the global value chain.

JEL Classification: C33, F13, F53
Keywords: Trade Facilitation; Trade expansion; Manufactured Exports, Panel Regression;
Africa.
Corresponding Author’s Email Address: akinkugbe@mopipi.ub.bw

INTRODUCTION

The role of international trade in industrialization, economic growth and development
has long been a topic of interest to economists and policy makers worldwide. A large
number of studies have examined this relationship empirically (Myrdal, (1957),
Harberler, (1959), Maizels, (1968), Michaely, (1962), Reidel, (1984), Singer and Grey,
(1988), Ng and Yeats, (1997)), and results from these studies confirmed Kravis, (1970)
conclusions that international trade provides an important stimulus to growth. Economic
theory therefore seems to suggest a relatively direct and simple chain of causality:
human development is enhanced through income growth; income growth is greater with
more cross-border trade; trade is increased through all conscious and indirect efforts at
trade facilitation. Consequently, interest has been high in identifying factors
constraining a country’s capacity to fully engage in trade and examining policy options
towards increasing such capacity. It is widely recognised that high foreign tariffs and
non-tariff restrictions reduce a country’s trade below potential levels. Equally important,
perhaps, self-imposed restrictions, as well as high production and transaction costs can
have similar adverse effects of reducing trade volume and the ability to compete
efficiently in global commerce. Given the fact that in recent times, the increasing move
                             
				
DOCUMENT INFO
Description: This paper examines how issues of trade facilitation continue to discourage the export of manufactured goods from Africa. Pooled, cross-country, annual time series data for the period 1995 - 2004 for 20 African countries were used to examine nature of the relationship between some selected indicators of trade facilitation-Corruption perception index, roads network, number of start-up procedures for register a business, taxes on exports-and export of manufactured goods. Our conclusions are that policy-regime improvements and conscious efforts at removing all forms of constraints to the free flow of goods could have a significant impact on goods exports from Africa. Our recommendations are that governments in the different African countries will need to focus on ways of achieving acceptable standards and best practices in terms of facilitating trade expansion. Reform policies have to be targeted at these indicators so as to be more engaged in the global value chain. [PUBLICATION ABSTRACT]
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