What Constrains Africa’s Exports?

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. This paper examines the effects of transit, documentation, and ports and customs delays on Africa's exports. The authors find that transit delays have the most economically and statically significant effect on exports. A one-day reduction in inland travel times leads to a 7 percent increase in exports. Put another way, a one-day reduction in inland travel times translates to a 1.5 percentage point decrease in all importing-country tariffs. By contrast, longer delays in the other areas have a far This paper—a product of the Trade and Integration Team, Development Research Group—is part of a larger effort in the department to understand how trade costs affect trade. Policy Research Working Papers are also posted on the Web at smaller impact on trade. The analysis controls for the possibility that greater trade leads to shorter delays in three ways. First, it examines the effect of trade times on exports of new products. Second, it evaluates the effect of delays in a transit country on the exports of landlocked countries. Third, it examines whether delays affect time-sensitive goods relatively more. The authors show that large transit delays are relatively more harmful because of high within-country variation. We would like to thank Allen Dennis for providing us with disaggregated data from the Doing Business report. We are also grateful to GPS team for providing us with detailed GPS data on Sub-Saharan Africa travel distances and times. In addition, we would like to thank seminar participants at the World Bank seminar, the Geneva Trade and Development Workshop and the European Trade Study Group (ETSG) conference. This paper received financial support from the governments of Finland, Norway, Sweden and the United Kingdom through the Multidonor Trust Fund for Trade and Development. The views presented in the paper are those of …