Increasing Africa's Participation in Global Trade: The Role of Market Access and Domestic Infrastructure

For many years, African countries have experienced slow economic growth. A major policy tool used to address this issue has been preferential market access whereby, certain developed countries have lowered and sometimes eliminated tariffs on imports from Africa. Despite this special treatment, however, there has been a sharp decline in Africa's global trade participation in the last few decades. There are many factors that may explain this phenomenon. First, while on average Africa has relatively good access to foreign markets, individual countries within the continent continue to face high tariff barriers. Second, preferential market access conceded to Africa has often been accompanied by numerous non-tariff barriers inhibiting African exports. Third, most African countries lack adequate trade facilitating infrastructure. All these factors suggest that the problem with Africa's low global trade participation cannot be addressed entirely using one policy approach. Along with increased market access, improving trade-related infrastructure and promoting aid for trade initiatives are crucial measures toward helping poor countries overcome supply-side constraints and integrate into the global economy. In fact, although preferential schemes have a large and positive impact on Africa, at times they are not sufficient and may even cause harm due to the narrow base of export diversity among African economies. Copyright (c) 2009 The Authors. Journal compilation (c) The Agricultural Economics Society and the European Association of Agricultural Economists 2009.