Africa in the global trading system

Abstract

Africa's development experience over the last four decades following independence has been disappointing. Statistics show that most countries in Africa were better off three decades ago when compared to their current situation. It is difficult to isolate one single factor that explains Africa's poor growth performance during the last 3 decades. However, comparing the policies pursued by Africa and other developing regions and the results achieved in terms of economic development, economists now tend to agree that Africa's poor trade performance during this period explains a major part of the continent's failure to grow. The paper attempts to pursue three main objectives. Firstly, it sets out to discuss the general context in which international trade is taking place, with the objective of showing that Africa's past trade strategies cannot be relied upon any longer. This discussion contrasts the current trend towards globalisation and overall trade liberalisation with Africa's protective policies and differential treatment in export markets. The second objective of the paper is to analyse the issue of Africa's marginalization. After defining this concept and providing data corroborating this fact, the factors that explain Africa's past trade performance are reviewed. The third aspect of this study presents empirical results of an econometric analysis based on a panel estimation to explain the determinants of Africa's trade performance.