Examining the “Impact of Trade Facilitation Indicators on Bilateral Exports” Involving Sub-Saharan Africa

ABSTRACT

This study examines the impact of trade facilitation measures on bilateral trade involving Sub-Saharan Africa. It uses country-specific data on logistic performance measures for 189 countries including 47 from SSA over a 9-year period from 2007 - 2015. Leveraging a logistics performance augmented gravity model, the findings show trade enhancing effects on all the six trade facilitation measures with customs efficiency, trade and transport-related infrastructure and competence and quality of logistics services having the greatest impact in that order. A unit improvement in the efficiency of customs clearance measure will enhance bilateral trade by 19% – 27% whilst that for infrastructure ranges between 16% and 24%.

Policy recommendations, therefore, focuses on a two-pronged approach – whilst investment in trade-related infrastructure is necessary, the investments required are huge and the benefits accrue in the medium to long-term. To achieve quick-wins, it is imperative that a special focus be given to an initiative that leads to improving the efficiency of customs clearance procedures.