International Trade and Growth Limitations: The case of Africa

Abstract

Africa, despite the natural wealth of its resources remains still at low development levels compared to the rest of the world. Given the importance of exports as a key factor for the economic development of African countries, we investigate whether international trade can create growth opportunities or whether there are "inherent weaknesses" that hinder this process. This paper presents and analyzes the foreign trade statistics of African countries, during the period 1995-2020. The topic is approached by analyzing recent trends and indicators of trade using the most up-to-date data from valid databases. The paper concludes that the structure of trade and in particular, the low export performance and the high export concentration in primary and natural resources (internal factors), combined with the volatility of the prices of these products in the international markets (external factors), make it extremely difficult for African economies to grow through international trade. In addition, Africa's participation in international production, as assessed by indicators that determine its position in the Global Value Chains, creates limited opportunities for technological upgrades, which is a critical factor in the development process.