At the fourth United Nations Conference on the Least Developed Countries (LDCs) held in Istanbul, Turkey, from 9 to 13 May 2011, the Heads of State and Government acknowledged the progress that has been made by LDCs over the past decade. But they also expressed concerns about the high levels of poverty and hunger prevalent in LDCs and committed to assisting LDCs in confronting their current and emerging development challenges and enabling half of these countries to meet the criteria for graduation from LDC status over the next decade.

There is the recognition that trade can play a positive role in reducing poverty and in addressing the complex and multifaceted challenges facing LDCs. However, this potential of trade for poverty reduction and development has not been realised in many LDCs, despite having achieved impressive export and growth performance and also having implemented significant trade reforms, particularly since the 1990s.

The failure of trade expansion to lead to poverty reduction can be ascribed to the fact that it has not created sufficient employment and has also gone hand in hand with an increase in inequality. More importantly, it is a consequence of the fact that trade has not been effectively mainstreamed into the national development strategies of LDCs. Although many LDCs are increasingly making efforts to mainstream trade into national development plans, there is a gap between the rhetoric of trade mainstreaming and its actual practice and outcomes.

In this context, there is the need for governments of LDCs, with the support of their development partners, to strengthen efforts to integrate trade into their national development strategies with a view to unlocking its potential for poverty reduction and development.

This paper discusses the experiences of three African LDCs (Ethiopia, Lesotho and Senegal) in mainstreaming trade into their development strategies, with a view to drawing lessons from these experiences for other LDCs. More specifically, it examines and analyses three policy documents that have been used as instruments or vehicles for mainstreaming trade into national development strategies in LDCs. These are: the Poverty Reduction Strategy Papers (PRSPs); the Diagnostic Trade Integration Studies (DTIS), and National Development Plans.

The three countries analysed were chosen because they are the African LDCs in UNCTAD’s project on “Strengthening the capacities of trade and planning ministries of selected Least Developed Countries to develop and implement trade strategies that are conducive to poverty reduction.” They are also interesting case studies because of their structural differences which make their trade and development experiences relevant for other LDCs.

Although the three are LDCs, Ethiopia and Lesotho are landlocked countries while Senegal is not landlocked. Furthermore, Ethiopia is an agriculturally dependent economy while Lesotho depends more on services and also manufacturing exports. While Senegal also has a large services sector like Lesotho, they both differ from Ethiopia in the sense that they are involved in monetary cooperation arrangements which have implications for trade and also the design and implementation of national development strategies.

The three countries also differ in terms of their main trading partners: over the period 2010-2014 the European Union was Ethiopia’s main trading partner; the United States was Lesotho’s main trading partner; and a large portion of Senegal’s exports went to sub-Saharan Africa. These differences in structure, geography and export markets make the experiences of the three African LDCs useful for drawing lessons for other LDCs.

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The aim of the Trade and Poverty Paper Series is to disseminate the findings of research work on the inter-linkages between trade and poverty and to identify policy options at the national and international levels on the use of trade as a more effective tool for poverty eradication. The opinions expressed in papers under the series are those of the authors and are not to be taken as the official views of the UNCTAD Secretariat or its member states.

The previous paper in the series, ‘Trade and Poverty Alleviation in Africa: The Role of Inclusive Structural Transformation’, is available here.