Trade Facilitation and Trade Flows in Africa

Despite a signiÖcant trade expansion that has been above the world average in the recent period, Africa still remains relatively marginalized in the world trading system. This paper sets out to analyze the extent to which various elements of the trade cost landscape in Africa may have contributed to shape trade patterns both within the continent and with the outside world. Various trade facilitation aspects are aggregated into four main indicators using alternatively simple average and factor analysis: border e¢ ciency, physical infrastructure, regulatory environment, information and communication technology, as well as the World Bankís Logistics Performance Index. These indicators are then related to bilateral trade áows in a gravity framework that accounts for a number of theoretical and empirical issues, and that distinguishes between agricultural and non-agricultural commodity trade and among various trading partners. The results indicate facilitating trade would generate varying trade gains, depending on which of the trade cost landscape, which commodity, which trading partner one considers, and which country in the bilateral trade relationship undertakes the reforms. These results o§er a strong basis for designing targeted trade facilitation reforms that would improve Africaís international trade position.