Trade Policy and Transport Costs: How EU aid can promote export growth in East Africa

Abstract

For trade to play a role in poverty reduction in sub-Saharan Africa, exports need to be increased along with the ability of sectors to adjust to increased competition following liberalisation of imports. This is especially important for agricultural products from which rural households derive incomes and which, in the form of food, are a major component of the consumption of the poor. However, trade liberalisation in itself does not ensure that exports will increase, nor that import-competing sectors will be able to adjust smoothly.

One explanation is that transport and transaction costs represent a significant burden on African countries, and constrain the export competitiveness of such countries. the primary focus of the research project is to assess the interaction of trade policy and transaction costs in determining trade performance, especially exports. This will inform the design of trade and related policies to contribute to poverty reduction.
This report includes an outline of original proposal, introduction, trade policy reform in SSA, trade costs and growth in SSA, development of methodology, comparative results, and preliminary conclusions.

Attachments to this document include drafts of five of the chapters for a proposed book:
Chapter 2: review of trade policy reform and performance in SSA
Chapter 3: trade, transport costs and growth
Country case studies (Kenya, Tanzania and Uganda)

There are also two CREDIT research papers on Malawi:
Export response to trade liberalisation in the presence of high trade costs: evidence for a landlocked African economy.
The Implications of Trade Policy and 'Natural' Barriers Induced Protection for Aggregate Demand for Imports: Evidence for Malawi.
All of the above are included as separate records.

Citation

Trade Policy & Transport Costs: How EU aid can promote export growth in East Africa, Centre for Research in Economic Development and International Trade (CREDIT), University of Nottingham, UK, 25 pp.

Trade Policy and Transport Costs: How EU aid can promote export growth in East Africa

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