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Have transport costs contributed to the relative decline of sub-Saharan African exports? Some preliminary empirical evidence

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  • Amjadi, Azita
  • Yeats, Alexander J.
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    Abstract

    From the mid-1950s to 1990, sub-Saharan Africa's share of global exports fell from 3.1 to under 1.2 percent, a decline that implies associated export earning losses of about $65 billion annually. Previous studies show that foreign trade barriers do not account for this poor performance. Indeed, African exports enjoy OECD tariff preferences. In the sub-Saharan African countries, too high a proportion of foreign exchange earnings is paying for Africa's high export transport costs. The authors demonstrate that relatively high transportation costs - especially for processed products - often place African exporters at a serious competitive disadvantage. African countries must use a far larger share of their foreign exchange earnings to pay for international transport services than other developing countries do - and the relative importance of those payments has been increasing. Why are Africa's transport costs so high? Ill-advised policies on the part of some African governments seem to have played a role, as their cargo reservation policies produced high"rents"for lines that have been shielded from the effects of competition. The failure to maintain or improve port and transport infrastructure has also played a role.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1559.

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    Date of creation: 31 Dec 1995
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    Handle: RePEc:wbk:wbrwps:1559

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    Keywords: Rural Roads&Transport; Economic Theory&Research; Transport and Trade Logistics; Common Carriers Industry; Environmental Economics&Policies; Transport and Trade Logistics; Common Carriers Industry; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Environmental Economics&Policies; Economic Theory&Research;

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    1. Bela Balassa, 1965. "Tariff Protection in Industrial Countries: An Evaluation," Journal of Political Economy, University of Chicago Press, vol. 73, pages 573.
    2. Finger, J M & Yeats, Alexander J, 1976. "Effective Protection by Transportation Costs and Tariffs: A Comparison of Magnitudes," The Quarterly Journal of Economics, MIT Press, vol. 90(1), pages 169-76, February.
    3. Waters, W G, II, 1970. "Transport Costs, Tariffs, and the Pattern of Industrial Protection," American Economic Review, American Economic Association, vol. 60(5), pages 1013-20, December.
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    Cited by:
    1. Adeel Malik & Jonathan R W Temple, 2005. "The Geography of Output Volatility," CSAE Working Paper Series 2005-07, Centre for the Study of African Economies, University of Oxford.
    2. Chisari, Omar & Ferro, Gustavo, 2011. "Tópicos de Economía de la Regulación de los Servicios Públicos," UADE Textos de Discusión 65_2011, Instituto de Economía, Universidad Argentina de la Empresa.
    3. Haider A. Khan & John Weiss, 2006. "Infrastructure for Regional Co-operation," IDB Publications 49838, Inter-American Development Bank.
    4. Hecht, Joy E., 1997. "Impacts of tariff escalation on the environment: Literature review and synthesis," World Development, Elsevier, vol. 25(10), pages 1701-1716, October.
    5. Sequeira, Sandra & Djankov, Simeon, 2010. "An Empirical Study of Corruption in Ports," MPRA Paper 21791, University Library of Munich, Germany.
    6. Nichodemus Rudaheranwa, . "Trade Policy and Transport Costs in Uganda," Discussion Papers 06/09, University of Nottingham, CREDIT.

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