Seaport efficiency and the trade balance in Africa

Abstract Seaports and their efficiency are particularly important for international trade flows and the trade balance. Notwithstanding the efficiency of seaports, there exists no empirical evidence on how it influences the trade balance. This paper provides empirical evidence on the effect of seaport efficiency on the trade balance in a sample of 27 African countries for the period 2010-2017. We do this with the aid of the dynamic system Generalised Method of Moments (GMM) estimation technique, which addresses potential endogeneity of regressors. The results suggest that seaport efficiency improves the trade balance in the short- and long-run periods. From a policy-oriented point of view, enhancing the efficiency of seaports in Africa is what policy reforms should target.