TITLE:
The Effectiveness of Aid for Trade in Sub-Saharan Africa
AUTHORS:
Guy Paulin Dazoue Dongue
KEYWORDS:
Aid for Trade, Trade Balance, Gravity Model, Poisson Pseudo-Maximum Likelihood, Sub-Saharan African Countries
JOURNAL NAME:
Theoretical Economics Letters,
Vol.15 No.1,
December
30,
2024
ABSTRACT: The purpose of this paper is to investigate the effectiveness of Aid for Trade in Sub-Saharan African countries. This study examines the nature of the link between Aid for Trade on both exports and imports of Sub-Saharan African countries with OECD countries over the period 2005 to 2017. From the estimation of the two respective gravity models by the Poisson Pseudo-Maximum Likelihood method, it emerges that aid for trade negatively affects the export flows and positively affects the import flows of Sub-Saharan African countries in the trade relationship with OECD countries. Aid for trade is therefore ineffective because it contributes to maintaining a trade deficit for sub-Saharan African countries. It is therefore recommended that development partners focus aid for trade on the recipient countries’ import substitution strategy.