ISCAP Proceedings: Abstract Presentation
The Impact of Trade and Logistics Performance of African Countries
Tomilade Amoo
Towson University
Stella Tomasi
Towson University
Abstract
Trade is recognized to achieve sustainable growth and poverty reduction in developing countries (Takele et al. 2019). For a nation to be competitive, it needs to exploit the opportunities available through international trade to increase productivity (Irfan-ul-Haque R. M., 1995). However, according to the World Trade Organization, the share of African exports in the global market has declined from 4.3 in 1973 to 2.4 in 2003 and 2.2 in 2016 (WTO 2015; WTO 2017; Takele et al. 2019). This study provides an empirical analysis of the factors within the Logistics Performance Index (LPI) that significantly influence export flows across 54 African countries over six years, from 2010 to 2022. The Logistics Performance Indicator (LPI) is used to analyze and determine the issues in economic trade for countries that can be used to support areas of expected improvement.
We focus on six key LPI variables, obtained from the World Bank Group Data Catalog: the ability to track and trace consignments (TT), competence and quality of logistics services (QL), ease of arranging competitively priced shipments (PE), efficiency of the customs clearance process (CC), frequency with which shipments reach the consignee within the scheduled or expected time (DE), and the quality of trade and transport-related infrastructure (IQ). Additionally, the study examines the impact of the overall LPI score (LPI) on export flows using regression models defined by Huynh and Hong (2022) and Takele et al. (2019).
The results indicate that among the six LPI variables, two variables have a significant impact on export flows which are the ease of arranging competitively priced shipments (PE) and the frequency with which shipments reach the consignee within the scheduled or expected time (DE).
The findings have important implications for policymakers and stakeholders in the logistics and trade sectors in Africa. To improve export flows, efforts should be made towards improving the quality of infrastructure for trade, custom clearance processes, delivery timeliness and ease of arranging competitively priced shipments. By addressing these key factors, African countries may have opportunities to increase their productivity and compete internationally, which can have the potential to improve the economy.
References
Irfan-ul-Haque, and Bell, R. Martin N. Trade, Technology, and International Competitiveness. Ukraine, World Bank, 1995.
Takele, Tesfaye B; Buvik, Arnt S. (2019) The role of national trade logistics in the export trade of African countries. Journal of Transport and Supply Chain Management; Johannesburg Vol. 13, (2019). DOI:10.4102/jtscm.v13i0.464
Huynh, Cong Minh and Hong, Thien Huong. (2002) The multi-dimension of international logistics performance and export flows: An empirical study from developing countries. Munich Personal RePEc Archive, Becamex Business School, Eastern International University, Binh Duong Province, Vietnam. 21 January 2022
WORLD BANK. (2024, July). Retrieved from Worldbank.org: https://databank.worldbank.org/source/world-development-indicators
WTO, 2015, International trade statistics 2015, World Trade Organization, Switzerland.
WTO, 2017, World trade statistical review 2017, World Trade Organization, Geneva.