Beyond borders: Making transport work for African trade
Africa has seen massive trade liberalisation in the last three decades. But the success of translating reduced tariffs into increased international trade has been limited and geographically unbalanced. One of the main reasons for this is the high cost of moving goods within countries.
While the rest of the developing world has been tapping into global value chains and raising international exports, African trade has, on average, stagnated and in some cases even regressed. This has happened despite a big reduction in tariffs, global logistic charges, and other factors affecting the cost of trading internationally.
One of the potential explanations for this stagnation is that intra-national trade costs remain substantially high in many countries in Africa. These costs are incurred both when transporting goods over long distances, and when clearing the goods at harbours or border controls. The costs then have a knock-on effect on the total volume and efficiency of international trade with other countries.
This growth brief looks at the cost of transporting goods across Africa and suggests that the reduction of trade costs could increase gains from globalisation to remote areas and help tackle regional inequality.