The Effects of Trade Facilitation on Trade Performance in Africa

Abstract

International trade is now an embodiment of the new order of the global economy, as it ensures the movement of goods and the factors involved in the production of these goods from one country to the other. However, several authors (see, e.g., Wilson et al., 2003; Portugal-Perez and Wilson, 2009; Mbekeani, 2010; Portugal-Perez and Wilson, 2012; Hoekman et al., 2017) have shown that the effectiveness of this movement depends largely on how trade is facilitated among the countries involved. Especially, for developing countries, such as those in Africa, trade facilitation is an important trade strategy because of the systematic market and coordination failures emanating from information asymmetry (Yakop and van Bergeijk, 2011). This market failure is more likely to affect South–South trade adversely, such that without trade facilitation by governments, market opportunities may be created even through trade agreements, but they cannot be utilized effectively (Afesorgbor, 2018).1 This is the case because complex trade arrangements dissuade firms and countries engaging in international production and trade.