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Trade openness in 2017 [1]. The trade-to-GDP ratio is an indicator of the relative importance of international trade in the economy of a country. It is calculated by dividing the aggregate value of imports and exports over a period by the gross domestic product for the same period.
International trade is, in principle, not different from domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. However, in practical terms, carrying out trade at an international level is typically a more complex process than domestic ...
PPP largely removes the exchange rate problem, but has its own drawbacks; it does not reflect the value of economic output in international trade, and it also requires more estimation than nominal GDP. [4] On the whole, PPP per capita figures are more narrowly spread than nominal GDP per capita figures. [5]
China and India are increasingly important trade partners; 12.5% of Africa's exports are to China, and 4% are to India, which accounts for 5% of China's imports and 8% of India's. The Group of Five (Indonesia, Malaysia, Saudi Arabia, Thailand, and the United Arab Emirates) are another increasingly important market for Africa's exports. [74]
Swahili cities were important trading ports for trade with the Middle East and Far East. [4] In the interior of Africa, trade was far more limited. Low population densities made profitable commerce difficult. The massive barrier of the Congo rainforests were more imposing than the Sahara, blocking trade through the center of the continent.
Africa is also a large market for: Americans, Chinese Economy, and Europeans plus it’s Industries. [citation needed] The AU future confederation's goals include the creation of a free trade area, a customs union, a single market, a central bank, and a common currency, thereby establishing economic and monetary union.
How the health of the economy is measured, and why the GDP calculation matters.
The international standard for measuring GDP is contained in the book System of National Accounts (2008), which was prepared by representatives of the International Monetary Fund, European Union, Organisation for Economic Co-operation and Development, United Nations and World Bank.