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Analysis of Future International Trade and Logistics in Africa: Considering Major Risks and Opportunities in the Post COVID-19 World

Author

Listed:
  • Fukushima, Hiroyuki
  • Abe, Masahiro
  • Shibasaki, Ryuichi
  • Alves, Lucas
  • Takada, Yuki
  • Onodera, Hitoshi
  • Furuichi, Masahiko

Abstract

Africa, which is expected to develop rapidly as a sizeable world market, is attracting attention as an attractive investment destination in various fields such as infrastructure, agriculture, energy, ICT, and finance. In particular, the African Continental Free Trade Area (AfCFTA) is expected to stimulate African intra-region/international trade and further economic growth. On the other hand, there is concern that COVID-19 will impede the growth of African economies: real GDP growth in Sub-Saharan Africa was -2.4% in 2020, and even after 2021, it has been pointed out that the African economy may lag behind the rest of the world. Thus, it is important to comprehensively consider risks such as COVID-19 after 2020 and other opportunities such as AfCFTA and to eliminate bottlenecks in logistics infrastructure that could become obstacles to economic growth in Africa. With the aim of clarifying the future vision of the international trade in Africa, this study developed multiple future scenarios considering risks and opportunities in Africa after the expansion of COVID-19 infection and uses the GTAP-RD (Recursive Dynamic) model and the GLINS (Global intermodal Logistics Network Simulation) model. The analysis using the GTAP-RD model revealed the transition of Africa's international trade for each future scenario and revealed that the most desirable society in the world as a whole will improve Africa's trade balance the most. The GLINS model analysis showed the regional spread of logistics infrastructure development effects, indicating that the spread of logistics infrastructure development will accelerate the spread of effects throughout Africa. Finally, we estimated Africa's future exports and imports using the GTAP-RD model again, using the logistics cost reduction rate from the GLINS model as the "ams" variable in the GTAP-RD model and found that it would increase intra-African trade and also increase exports to the rest of the region.

Suggested Citation

  • Fukushima, Hiroyuki & Abe, Masahiro & Shibasaki, Ryuichi & Alves, Lucas & Takada, Yuki & Onodera, Hitoshi & Furuichi, Masahiko, 2022. "Analysis of Future International Trade and Logistics in Africa: Considering Major Risks and Opportunities in the Post COVID-19 World," Conference papers 333398, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333398
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