The Marginalization of Africa in World Trade

advantage of trading opportunities has always been under contention. Data indicate that the continent’s share of world exports has declined sharply, from about 5.5 percent in 1975 to about 2.5 percent in 2002 (Figure 1). At face value, this declining share points to the increased marginalization of Africa in world trade, but the observed pattern of trade need not be inconsistent with predicted trade, which is dependent on income levels and trading costs between countries, among other factors. Evidence from existing literature on the trading status of Africa is mixed, based on varying timeframes, methodologies, and regions of focus (for example, comparisons among developing countries or between industrialized and developing countries). Researchers like Sachs and Warner (1997) assert that Africa has been left out of the process of globalization, while the World Bank (2000) states that losses in world trade have cost Africa almost US$70 billion a year, reflecting lack of product diversification and shrinking market shares for traditional goods. Subramanian and Tamirisa (2001) also find evidence for the marginalization of Africa in world exports. Separating the continent into two distinct regions, they find that Central and West Africa has exhibited increasingly low trade performance over time, whereas East and Southern Africa has shown average performance with indications that it also may not be keeping pace with global integration. In contrast to the studies cited above, a number of other studies argue that Africa’s trade flows have been consistent with predicted trade, meaning that the continent has successfully utilized trading opportunities based on changes in the factors that determine trade levels. A pioneering study by Foroutan and Pritchett (1993) argues that there is no evidence to suggest that trade flows within Sub-Saharan Africa were differentially low, either as a result of poor policy choices or weak infrastructure. The authors observe that trade flows tallied with predicted trade levels and that low levels of trade could be explained by low levels of gross domestic product (GDP). According to Rodrik (1998), Africa participates in international trade as much as can be expected according to international benchmarks for trade volume derived from a country’s income level, size, and geographic location. Coe and Hoffmaister (1998) support Rodrik’s results, estimating a gravity model of bilateral trade between developing and industrialized countries. Their results indicate that in the early 1990s the trade performance of Africa was in fact normal compared with developing countries in other regions. sustainable solutions for ending hunger and poverty