The World bank has stated that the cost of trade in Nigeria and Ethiopia is four to five times higher than what obtains in the United States due to insecurity, higher transportation costs, topography and poor road infrastructure.
In its Africa Pulse publication released on Monday , the global lender noted that market distortions across Africa results in price differences of imported food and non-food products, indicating lack of integration across African markets.
The report concluded that the consequences of these distortions include preference of African producers to sell locally rather than export.
Furthermore, the report noted that frictions in the labour markets across Africa are as a result of high transport cost, elevated cost of screening workers and lack of information on labour opportunities.
The World Bank also captured the influence of state involvement through regulation in markets across Africa creating barriers to trade competition and investment. It noted the tendency for big players in such environments to set prices above market rate to the disadvantage of consumers, small competitors and workers.
It also stated that such anti-competitive market environment stifles innovation and further inhibits the growth trajectory in such economies.
