The Significance of Transport Costs in Africa

Overview
  • INSTITUTE:
    UNU-WIDER
    PUBLISHER:
    United Nations University Press
    VOLUME:
    Policy Brief No. 5, 2007
    TITLE:
    The Significance of Transport Costs in Africa
    AUTHORS:
    by Wim Naudé and Marianne Matthee
    PUB DATE:
    2007•12•27
    ISSN WEB:
    1814-8026
    ISBN 13:
    978-92-808-3041-5
    COPYRIGHT:
    United Nations University
    COPYRIGHT YEAR:
    2007

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    The success of Africa’s exports, as well as its spatial development, depends on lowering transport costs. In this Policy Brief, we address a number of pertinent questions on transport costs in Africa, such as ‘what are transport costs?’, ‘do transport costs matter for trade?’, ‘how important are transport costs in practice?’, and ‘why are Africa’s transport costs so high?’ We present a case study of the firm location decisions of exporters in South Africa to illustrate the significance in particular of domestic transport costs for manufactured exports. The message from this Policy Brief is that Africa’s international transport costs are significantly higher than that of other regions, and its domestic transport costs could be just as significant. Moreover we show how domestic transport costs influence the location, the quantity, and the diversity of manufactured exports. Various policy options to reduce transport costs in Africa are discussed.