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Trade Integration in Africa: Unleashing the Continent's Potential in a Changing World
Author:
Ms. Asmaa A ElGanainy
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Shushanik Hakobyan
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Fei Liu
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Hans Weisfeld
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Ali Abbas
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Céline Allard
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Hippolyte W. Balima https://isni.org/isni/0000000404811396 International Monetary Fund

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Celine Bteish
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Rahul Giri https://isni.org/isni/0000000404811396 International Monetary Fund

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Mr. Daniel S Kanda
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Sergii Meleshchuk https://isni.org/isni/0000000404811396 International Monetary Fund

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Mr. Gustavo Ramirez
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Robert Zymek
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Mr. Vivek B. Arora
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Mr. Subir Lall
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Benjamin R Kett
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Miss Megan M Pohl
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Series:
Departmental Papers
Volume/Issue:
Volume 2023: Issue 003
Language:
English
Publication Date:
05 May 2023
DOI:
https://doi.org/10.5089/9798400232794.087
ISBN:
9798400232794
ISSN:
2616-5333
Pages:
64
Keywords:
African Continental Free Trade Area (AfCFTA); regional trade integration; trade in goods; trade in services; global value chains; trade policy; trade-enabling environment.; trade environment; AfCFTA implementation; trade policy landscape; IMF team; trade pattern; Exports; Trade integration; Tariffs; Trade agreements; Africa; Global; Southern Africa; North America
Legal-disclaimer:
The Departmental Paper Series presents research by IMF staff on issues of broad regional or cross-country interest. The views expressed in this paper are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Since the 1960s, several initiatives have been undertaken to enhance trade integration in Africa. However, substantial tariff and nontariff barriers remain in place. In recent years, African leaders have shown a renewed push for regional integration by signing the agreement on the African Continental Free Trade Area (AfCFTA). The AfCFTA has the potential to transform regional trade and thereby lift growth and support livelihoods across the continent. This paper lays out the benefits that successful AfCFTA implementation could unlock for Africa in terms of income, jobs, and other benefits. It is based on an empirical analysis of the obstacles to trade in goods and services and regional value chain integration along with a discussion of how regional trade integration and supporting policies could help African countries cope with ongoing global and domestic trends. The empirical analysis investigates the role of trade policy and the broader trade-enabling environment in determining the bilateral goods trade flows and country-level trade in services. It sheds light on how the implementation of AfCFTA and supporting policies could boost trade and income as well as help African countries integrate into regional value chains. The findings suggest that plausible reductions in tariffs and nontariff barriers under AfCFTA, along with improvements in broader trade-enabling environment (trade infrastructure, financial development, and domestic security), would substantially boost intra-African trade in goods and services, and support integration into regional value chains. Further, regional trade integration could be an important element of a strategy for African countries to cope with rapid population growth, climate change, and emerging geopolitical fragmentation.
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Cover Departmental Papers
Departmental Papers
ISSN:
2616-5333
Publisher:
International Monetary Fund