Monitoring aid for trade in Africa : assessment of the effectiveness of the aid for trade

Abstract

This paper tries to fill the gap on the effects of Aid for Trade on trade capacity constraints and trade performance outcomes in Africa. Using data on specific categories of aid for trade, which is matched with specific desired trade-related outcomes, and applying ex post econometric analysis, the study assesses whether Aid for Trade in Africa has had any significant impact. The findings of this study seems to suggest that aid for trade in Africa, controlling for other factors, matters both for addressing trade capacity constraints and promoting trade. The study finds that Aid for Trade reduces cost of trading, promotes export diversification as well as improving Africa’s trade competitiveness. This therefore has serious policy implications for Africa as a whole, and individual countries in particular if they are to benefit from trade reforms.