The trade effects of the African Continental Free Trade Area: An empirical analysis

This study examines the possible effects of the African Continental Free Trade Area (AfCFTA) agreement tariff reduction protocol on intra‐African goods trade using two approaches: trade indices and a gravity model. In both approaches, an attempt to identify the trade‐creation and trade‐diversion eff...

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Bibliographic Details
Published inWorld economy Vol. 46; no. 2; pp. 328 - 345
Main Authors Geda, Alemayehu, Yimer, Addis
Format Journal Article
LanguageEnglish
Published Oxford Blackwell Publishing Ltd 01.02.2023
Subjects
Activism
African Continental Free Trade Area
Economic analysis
Effects
Exports
Free trade
Gravity
gravity model
Infants
Political participation
trade indices
trade‐creation
trade‐diversion
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Summary:This study examines the possible effects of the African Continental Free Trade Area (AfCFTA) agreement tariff reduction protocol on intra‐African goods trade using two approaches: trade indices and a gravity model. In both approaches, an attempt to identify the trade‐creation and trade‐diversion effects of the proposed AfCFTA is made. The two approaches combined suggest that the AfCFTA could raise intra‐African exports from the average annual value of US$ 72.7 billion (2015–2017) by about US$ 13.7 billion (by about 19%). For the success of the AfCFTA, the success in political activism needs to be combined with a continental industrial strategy that includes continental protection for infant industries in tandem with this continental liberalisation.
ISSN:0378-5920
1467-9701
DOI:10.1111/twec.13362