Aid for Trade and Structural Transformation in Sub-Saharan Africa

This paper analyses empirically whether Aid for Trade (AfT) programmes have assisted the process of structural transformation in African countries. It first analyses the impact on trade flows and trade costs, which are the main channels of transmission from AfT flows to structural change, and then examines the direct impact on structural change. Using a rich dataset on trade and aid flows for sub-Saharan African (SSA) countries from 1995–2010, the paper shows that AfT flows appear not to have had any statistically significant impact, and the only positive impact that can be identified is in reducing the time of exporting and importing. Overall, the results suggest that factors other than AfT flows explain different experiences in relation to structural change in SSA.