IMPACTS OF AFRICA'S TOTAL AND COMMODITY-BASED TRADE WITH CHINA AND OECD COUNTRIES

Abstract

This paper studies the changes in the pattern of Africa’s trade with China and OECD countries, and the impacts of these changes on sub-Saharan Africa’s economic growth. In the study, the country-level total exports and imports, as well as the commodity-based exports and imports are considered for 42 sub-Saharan African countries between 1980 and 2014. The results show that as the share of China in sub-Saharan Africa’s trade has significantly increased, a declining trend is observed for OECD countries, traditional trading partners. Despite changing trade links, the investigation of the commodity-based exports and imports indicate that the types of imported and exported commodities have not changed much for Africa. However, a strong link is observed between economic growth in SSA and its changing trade links from the OECD countries towards China at the total level as well as at the commodity level. The study concludes that there is an increase in the international competition for Africa’s commodities, and resulting in improvements in the terms of trade has led to higher income growth in the region. Keywords: China, OECD, Sub-Saharan Africa, International Trade, Growth Journal: Eurasian Journal of Economics and Finance