Logistics and Disaggregated Trade among Selected Sub-Saharan African Countries

Abstract

The improvement in technology and reduction in transportation cost as well as the liberalization of trade has led to the tremendous growth in global trade. However, the contribution of the sub- Saharan Africa (SSA) region to world trade is very low due to the high cost involved in trading. The SSA region is characterized by weak and inefficiencies in its logistic structures, among other factors, causing the region’s poor performance and contribution to global trade. To this end, the study employed the Stochastic Frontier Gravity Model (SFGM) to analyze the effects of logistics on disaggregated trade for a panel of 24 SSA countries over the period 2007 to 2018. The frontier estimates revealed that aggregated logistics performance has a positive and significant effect on all the disaggregated trade products. The results of the disaggregated logistics also revealed that all the individual logistics indicators are efficient for the trade-in agricultural, forestry, and fishery products for the selected SSA countries whilst international shipment, logistics quality, and competency, and tracking and tracing are efficient for the smooth trade of mineral products, and manufactured products for the selected countries with customs service, infrastructure, and timeliness being inefficient for the trade of these products.