Abstract

Background: This article critically examines the role of trade logistics in the exports of African countries. The performance of the trade logistics of African countries was analysed using the World Bank logistics performance index (LPI) and its components. The study was conducted based on the performance statistics of countries around the world in 2016. Objectives: The aim of this study was to identify African countries’ inefficient trade logistics areas based on LPI components for future improvement; and to investigate the relevance of trade logistics performance of African countries on export values in order to boost the region’s merchandise export share in the global market. Method: The methodological approach employed in this study is a combination of both descriptive and inferential data analysis. The African countries’ logistics performance in international trade was summarised using LPI median values. The effect of the performance of trade logistics on exports was explored based on a gravity model of international trade. For the estimation, the Heckman selection approach was applied to incorporate zero bilateral trades. Results: On average, African countries experience the lowest LPI score, particularly in terms of quality of trade and transport-related infrastructure, and customs and border clearance. A successful improvement in these areas would enhance African countries’ supply chain deliveries including on-time delivery, tracking and tracing and international shipments in cross-border transactions. Conclusion: The evidence from the gravity model estimates of this study suggests that an improvement in any of the LPI components can lead to significant growth in the export of African countries. This could then increase the African merchandise export share in global trade. The gravity model results also show that landlocked countries have lower trade flows than their coastal neighbours.

Highlights

  • Following the Industrial Revolution, world trade has grown faster than the world’s output of manufactured and primary products

  • This study intended to show the main inefficiencies of trade logistics for the regulators of African countries

  • The major impediments of trade logistics performance for African countries include a lack of logistics infrastructure development and customs and border clearance

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Summary

Introduction

Following the Industrial Revolution, world trade has grown faster than the world’s output of manufactured and primary products. The export of countries has become significantly larger except for the period between 1913 and 1950 as a result of the two world wars and the Great Depression (Ul Haque et al 1995). Global trade has continued to grow rapidly. From 1951 to 2004 global trade of merchandise, including agricultural products, fuel, and mining and manufacturing products has grown on average by 5.9 per annum (World Trade Organization [WTO] 2005). This article critically examines the role of trade logistics in the exports of African countries. The performance of the trade logistics of African countries was analysed using the World Bank logistics performance index (LPI) and its components. The study was conducted based on the performance statistics of countries around the world in 2016

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