The past decade´s emphasis on trade liberalization and export orientation has led to phenomenal growth in world merchandise trade, which has consistently grown faster than output. Africa has also seen an increase in its trade relative to gross domestic product (GDP). However, on the whole, Africa´s share of world trade has declined. This phenomenon has as much to do with the structure of international trade as with the composition of Africa´s merchandise trade, the trade policies applied on the continent in the past 20 years, market access, and agricultural policies in industrial countries.
This Report attempts to place in perspective the reasons for Africa´s poor performance and its declining share in world trade. It reviews the structure and composition of Africa´s trade, along with the associated problems of commodity dependence, and it discusses the factors influencing both Africa´s competitiveness and its ability to diversify into more market-dynamic sectors. It briefly examines policy measures adopted in the past to address the "commodity problem", which is at the heart of the continent´s trade performance. Finally, it discusses national and international policy measures required to help Africa overcome some of the hurdles it faces.