Seaport efficiency, port throughput, and economic growth in Africa

This paper examines the impact of seaborne trade on economic growth, from a port throughput and seaport efficiency perspective. We study the impact of port throughput on economic growth and the role seaport efficiency plays in that relationship. The paper uses panel data on 28 African countries with seaports, over the period 2010 to 2018, and we employ the system generalized method of moments approach for the analysis. We establish a direct significant positive effect of seaport efficiency and port throughput on economic growth in Africa. Specifically, a 1% increase in seaport efficiency (port throughput) improves economic growth between 0.014 and 0.038% (0.028% and 0.043%). We further show that improvement in seaport efficiency is vital for port throughput, to have its greater effect on economic growth in the Continent. Finally, regarding the other explanatory variables that influence economic growth, our findings reveal that, government spending, inflation, domestic investment, trade, financial development, and institutional quality are important determinants of economic growth in Africa. Based on these findings, we recommend port policies that promote seaport efficiency in Africa.