Journal of African Trade
Augustin K. Fosu
Pages: 1 - 3
The impact of HIV/AIDS on foreign direct investment: Evidence from Sub-Saharan Africa
Elizabeth Asiedu, Yi Jin, Isaac K. Kanyama
Pages: 1 - 17
We construct a theoretical model that examines the relationship between HIV/AIDS and foreign direct investment and employ panel data from 41 countries in Sub-Saharan Africa (SSA) to test the implications of the model. We find that HIV/AIDS has a negative but diminishing effect on FDI. Furthermore, the...
Infrastructure, trade facilitation, and network connectivity in Sub-Saharan Africa☆,☆☆
Pages: 1 - 22
This paper uses new measures of value added in exports in two sectors (textiles and clothing, and agriculture) to examine the linkages between trade facilitation and infrastructure on the one hand, and value chain participation on the other. It applies network analysis methods to derive a summary measure...
Export market destination and performance: Firm-level evidence from Sub-Saharan Africa☆
Pages: 1 - 19
This paper uses a novel manufacturing firm-level survey data in 19 sub-Saharan African (SSA) countries to explore the linkages among a number of export-market destinations (e.g., China, India, other Asia, EU, US, MENA, SSA excluding South Africa, and South Africa) and performance. The paper also examines...
The consequences of Brexit for Africa: The case of the East African Community☆
Pages: 1 - 17
How will Brexit impact on Africa? This paper looks at the available empirical evidence and carries out a Computable General Equilibrium simulation, focusing particularly on the prospects for the East African Community (EAC). The paper makes three main points. First, while the direct impacts through investment,...
The AfCFTA and African Trade—An Introduction to the Special Issue
Hippolyte Fofack, Andrew Mold
Pages: 1 - 11
The agreement establishing the African Continental Free Trade Area (AfCFTA) has been attracting a great deal of attention in academic and policy circles, as well as within the international development community. The growing interest in the AfCFTA partly reflects the fact that the African continent is...
The Effects of Trade Facilitation on Trade Performance in Africa
Daniel Sakyi, Sylvanus Kwaku Afesorgbor
Pages: 1 - 15
Institutional trade barriers constitute substantial constraints for a number of exporters and importers. These barriers are multidimensional and they impede trade flows and trade performance of many developing countries, including African countries. In particular, the International Trade Centre through...
Regional Integration and Trade: The Case of the Common Market for Eastern and Southern Africa (COMESA) Free Trade Area
Pages: 1 - 12
This paper examines the factors influencing intra-Common Market for Eastern and Southern Africa (COMESA) trade by empirically investigating whether the Free Trade Area (FTA) contributed to trade growth from 1997 to 2015. Gravity models for exports and imports were estimated to identify the factors influencing...
Mind the Measure: On the Effects of Antidumping Investigations in Egypt
Nada Hazem, Chahir Zaki
Pages: 1 - 14
This paper examines the impact of the antidumping measures initiated by the Government of Egypt on imports during the period 2001–2015. Our contribution is twofold. First, the paper distinguishes between the effect of antidumping measures on the value, the volume and the price of imports. Second, it...
Does trade reduce poverty? A view from Africa☆
Maëlan Le Goff, Raju Jan Singh
Pages: 5 - 14
Although trade liberalization is being actively promoted as a key component in development strategies, theoretically, the impact of trade openness on poverty reduction is ambiguous. On the one hand, a more liberalized trade regime is argued to change relative factor prices in favor of the more abundant...
The African Continental Free Trade Area: A Historical Moment for Development in Africa
Vera Songwe, Jamie Alexander Macleod, Stephen Karingi
Pages: 12 - 23
This policy piece surveys the potential of the African Continental Free Trade Area (AfCFTA) as a historical framework for setting Africa on the path toward structural transformation and sustainable development. After evaluating the part that the landmark continental trade integration reform will play...
Common Currency and Intra-Regional Trade in the Central African Monetary Community (CEMAC)
Divine Ngenyeh Kangami, Oluyele Akinkugbe
Pages: 13 - 22
We applied the threshold autoregressive and difference-in-differences techniques to examine the effects of adopting a common currency on bilateral trade flows between member states of the Central African Economic and Monetary Community (CEMAC) customs union, over the period from 1980 to 2013. We found...
The African Economic Partnership Agreements with the EU: Reflections inspired by the case of the East African Community☆
Jaime de Melo, Julie Regolo
Pages: 15 - 24
This paper appraises the likely effects of the Economic Partnership Agreement (EPA) between the East African Community (EAC) and the European Union (EU). Customs data are used to estimate the revenue and welfare effects of an EPA with and without an exception list. Revenue and welfare effects are rather...
Agricultural Imports, Agriculture Productivity and Economic Growth in Sub-Saharan Africa
Esther N. Mwangi, Fuzhong Chen, Daniel M. Njoroge
Pages: 15 - 28
This study investigates the causal links among agricultural imports, agriculture productivity, and economic growth in 40 sub-Saharan African countries over the period 1990–2015. Granger causality tests are applied to infer direction of causality, and the generalized two-stage least squares instrumental...
Trade Reforms and Integration of Cocoa Farmers into World Markets: Evidence from African and non-African Countries
Komi Tsowou, Samuel K. Gayi
Pages: 16 - 29
The paper analyses cocoa farmers’ integration into global markets taking into account trade reforms in five cocoa producing countries. The analysis investigates price transmission mechanisms from world to domestic cocoa markets in the context of trade liberalizing policy reforms. The empirical analysis...
The potential for internal trade and regional integration in Africa
Alemayehu Geda, Edris Hussein Seid
Pages: 19 - 50
This study examines the potential for intra-Africa trade and the prospects of advancing regional economic integration through such trade. A variety of empirical models are deployed for the purpose. The analysis and model simulation results reveal the existence of significant potential for intra-Africa...
Trade dependence, liberalization, and exports diversification in developing countries☆
Patrick N. Osakwe, Amelia U. Santos-Paulino, Berna Dogan
Pages: 19 - 34
This paper explores the relationship between trade, trade liberalization, and exports diversification in developing and Sub-Saharan African (SSA) countries. The non-parametric analyses indicate that developing countries that are more open to trade (based on trade intensity) tend to have more diversified...
Effect of exchange rate volatility on trade in Sub-Saharan Africa☆
Bernardin Senadza, Desmond Delali Diaba
Pages: 20 - 36
The volatile nature of exchange rates with the advent of floating regimes has received much attention in economic research. The volatility is generally perceived as negatively affecting international trade. While theoretical predictions and empirical outcomes appear mixed, the balance seems to tilt in...
Trade facilitation and trade participation: Are sub-Saharan African firms different?☆
Pages: 23 - 39
Sub-Saharan Africa is the region where firms face the greatest hurdles when it comes to cross-border trading. This paper examines how these firms, relative to their counterparts in the developing world, would respond to changes in the trade environment as a result of trade facilitation reforms. Using...
Effect of China’s Zero-Tariff Treatment under Forum on China-Africa Cooperation (FOCAC) on Export Diversification in Beneficiary Countries in Africa
Zhina Sun, Ehizuelen Michael Mitchell Omoruyi
Pages: 23 - 32
In this study, we quantitatively assessed the effect of China’s zero-tariff treatment on export diversification in beneficiary countries in Africa. We assessed its overall effect and its effect on particular industries and regions. The results showed that, overall, zero-tariff treatment significantly...
Afreximbank in the Era of the AfCFTA
Pages: 24 - 35
The African Export-Import Bank (Afreximbank) was established in 1993 as a crisis management institution on the heels of the Latin American debt crisis of the 1980s. It has since grown into Africa’s foremost regional integration bank, and is playing a critical role in supporting the implementation of...
The industrialisation challenge for Africa: Towards a commodities based industrialisation path
Mike Morris, Judith Fessehaie
Pages: 25 - 36
Since the turn of the millennium many African economies have been reintegrated into the world economy on a positive note and experienced substantial economic growth. This growth has primarily been concentrated in commodity exports. The central question facing African economies is how to use economic...
Export Diversification Effects of Aid for Trade in sub-Saharan Africa
Pages: 29 - 36
This paper uses panel data of 42 sub-Saharan Africa countries from 2005 to 2015 to examine the effect of aid for trade (AfT) on export diversification. The average Hirschman-Herfindahl index measure of 0.77 indicates that the export basket of sub-Saharan African countries is very narrow. This is further...
Foreign Direct Investment and Export Competitiveness in Africa: Investigating the Channels
Gladys Gamariel, Seedwell Hove
Pages: 30 - 46
Foreign Direct Investment (FDI) into Africa has surged in recent years. At the same time, international trade has increased, exposing African countries to international competition. This raises the question of whether FDI plays a role in enhancing export competitiveness. This study investigates the impact...
Is it Export- or Import-Led Growth? The Case of Kenya
Peter Simiyu Wamalwa, Maureen Were
Pages: 33 - 50
The role of exports in promoting economic growth has been widely acknowledged. This paper analyses the link between exports, imports, and growth performance in Kenya using time series data. Despite trade liberalization and export promotion policies pursued over time, Kenya’s export growth has been sluggish,...
Trade facilitation and social welfare in Africa☆
Daniel Sakyi, Isaac Bonuedi, Eric Evans Osei Opoku
Pages: 35 - 53
Improving social welfare in the developing world remains a top priority on the global development agenda, as policymakers and international development partners worldwide strive to meet the Sustainable Development Goals by 2030. Using data on 40 African countries over the period 2010–2015, this paper...
Environmental Effects of the African Continental Free Trade Agreement: A Computable General Equilibrium Model Approach
Marta Bengoa, Somya Mathur, Badri Narayanan, Hanna C. Norberg
Pages: 36 - 48
Growth and development in middle- and low-income countries often come at an environmental cost, but is that trade-off always necessary? This study uses a computable general equilibrium model to estimate the macroeconomic and environmental impact of the world’s most significant plurilateral trade agreement,...
Attracting international private finance for African infrastructure☆
Pages: 37 - 44
Africa’s trade is impeded by poor infrastructure. Inadequate transport infrastructure raises costs analogous to trade barriers, while inadequate power discourages investment. Yet Africa’s infrastructure needs greatly exceed its capacity to finance them. There is therefore a need, and an opportunity,...
Aid for trade and Africa’s trade performance: Evidence from bilateral trade flows with China and OECD countries☆
Pages: 37 - 60
The optimism surrounding aid for trade (AfT) led scholars and practitioners to probe its link with trade performance of aid-recipient countries in Africa. In the absence of formal evaluation guidelines, most previous studies, using aggregate data, have looked into the impacts of AfT on exports and imports...
Regional Integration and Growth Spillovers: Is Africa an Economic Space?
Abdoulaye Seck, Founty Alassane Fall, Khadidiatou Aidara
Pages: 37 - 44
Market integration is often associated with economic growth spillovers, to the extent that strengthened trade linkages would make economic growth in one country an opportunity for growth to its partners. This paper uses a spatial dynamic panel data approach to analyze the extent to which Africa and its...
Trade and economic growth in developing countries: Evidence from sub-Saharan Africa
Pages: 41 - 56
This study investigates how trade openness affects economic growth in developing countries, with a focus on sub-Saharan Africa (SSA). We use a dynamic growth model with data from 42 SSA countries covering 1980 to 2012. We employ the Pooled Mean Group estimation technique, which is appropriate for drawing...
On the accuracy of trade and GDP statistics in Africa: Errors of commission and omission
Pages: 45 - 52
African trade statistics suffer from errors of commission and omission. A quarter-century ago, Alexander Yeats (1990) compared receipts of importers and exporters and concluded that the data could not be used to determine the magnitude, direction, or composition of trade. The only fact to be safely deduced...
The Demand for Imports and Exports in Africa: A Survey
Michael Olabisi, W. Charles Sawyer
Pages: 45 - 59
To drive economic development, it is important for policy makers to have a good understanding of the linkages between imports, exports, and the rest of the economy. This is particularly true for Africa. The continent depends on exports of commodities to finance imports of manufactured goods for consumption...
Trade and Industrialisation in Africa: SMEs, Manufacturing and Cluster Dynamics
Raphael Kaplinsky, Mike Morris
Pages: 47 - 59
Trade in manufacturing through global and regional value chains has played an especially prominent role in global economic growth in recent decades. However, Africa faces severe challenges in growing manufacturing activities in the face of China and Southeast Asia’s competitive dominance of global manufactured...
Prospects and Challenges for Supply Chain Trade under the Africa Continental Free Trade Area☆
Jaime de Melo, Anna Twum
Pages: 49 - 61
African countries are negotiating the African Continental Free Trade Area with the aim to spearhead global value chain (GVC) trade among African countries as a driver for robust economic growth. This paper evaluates the participation of Sub-Saharan African Regional Economic Communities (RECs) in GVC-related...
Who profits from trade facilitation initiatives? Implications for African countries☆
Bernard Hoekman, Ben Shepherd
Pages: 51 - 70
Extensive research has demonstrated the existence of large potential welfare gains from measures to facilitate trade — reduce trade costs — for African countries in particular. However, concerns have been expressed by policymakers regarding the distribution of the benefits and costs of trade facilitation....
Trade Costs and Demand-Enhancing Effects of Agrifood Standards: Consequences for Sub-Saharan Africa
Aristide Djimgou Tchakounte, Dela-Dem Doe Fiankor
Pages: 51 - 64
Agrifood standards impede trade by increasing compliance costs, but they can also enhance trade by signalling quality. This paper disentangles the trade costs and demand-enhancing effects of two important standards—technical barriers to trade, and sanitary and phytosanitary measures—on (i) global agricultural...
Oil prices and African stock markets co-movement: A time and frequency analysis
Grakolet Arnold Zamereith Gourène, Pierre Mendy
Pages: 55 - 67
This paper examines the co-movement between OPEC (Organization of Petroleum Exporting Countries) oil prices and the six largest African stock markets. We used wavelet coherence to analyze the evolution of this relationship both in time and by frequency. Our results show that the co-movement between African...
Modelling the economic impact of the tripartite free trade area: Its implications for the economic geography of Southern, Eastern and Northern Africa☆
Andrew Mold, Rodgers Mukwaya
Pages: 57 - 84
This study evaluates the economic impact of the proposed COMESA-SADC-EAC Tripartite Free Trade Area (TFTA) on 26 African countries. It uses the Global Trade Analysis Project (GTAP) computable general equilibrium (CGE) model and database to measure the static effects of the establishment of the TFTA on...
How Do Trade Margins Respond to Exchange Rate? The Case of Egypt✩
Chahir Zaki, Alia Abdallah, May Sami
Pages: 60 - 80
This paper examines the effect of the exchange rate devaluation on the quantity and value of exports (intensive margin of trade), as well as the ability to export new products and/or venture into new export markets (extensive margin of trade). Using monthly firm-level and sector-level data for the period...
The Impact of Imports from China on African Textile Exports
Pages: 60 - 68
This study uses Comtrade trade data covering 1990–2017, 14 textile subsectors, and 53 African countries with their main trade partners to evaluate Chinese trade impacts on African textile exports over three subperiods at the sector level. It finds that, although textile imports from China had a significant...
Foreign direct investment, productivity and the technology gap in African economies
Christopher Malikane, Prosper Chitambara
Pages: 61 - 74
This paper investigates the impact of foreign direct investment on total factor productivity conditional on relative backwardness in a panel of 45 African countries over the period 1980–2012. We use two measures of relative backwardness, namely: the distance from technological frontier and the income...
Estimating the Effect of AfCFTA on Intra-African Trade using Augmented GE-PPML
Hippolyte Fofack, Richman Dzene, Omar A. Mohsen Hussein
Pages: 62 - 76
This paper draws on a general equilibrium poisson pseudo maximum likelihood model augmented by a dynamic capital accumulation to estimate the effects of the African Continental Free Trade Agreement (AfCFTA) on intra-African trade flows. The empirical results show that the AfCFTA could raise intra-African...
Trade Integration in West Africa: Does the Quality of Institutions Matter?
Pages: 65 - 81
When asked why the level of intra-regional trade in West Africa is low despite regional integration efforts, the literature highlights the poorly diversified structure of economies, the non-application of community arrangements, the inconsistency or mismanagement of trade policies, supply constraints,...
How well does observable trade data measure trade friction costs? Evidence from member countries within the Economic Community of West African States (ECOWAS)
Festus Ebo Turkson
Pages: 69 - 86
This paper is an empirical application of the micro-founded measure of trade costs by Head and Mayer (2004) and Novy (2013). The derived micro-founded measure, consistent with the Ricardian and heterogeneous firm’s models of trade, captures all trade costs components that hitherto have been impossible...
Exchange Rate Dynamics and Trade Balance in Selected African Countries
Mohammed Shuaibu, Abdulrasheed Isah
Pages: 69 - 83
African countries have over the years experienced persistent current account deficits. The role of asymmetries in explaining the response of trade balance to exchange rate movement has not received adequate attention as linear models dominate extant empirical literature. In this paper, we examined the...
Differential effects of trade on economic growth and investment: A cross-country empirical investigation☆
Pages: 71 - 85
The paper empirically examines the differential effects of trade on economic growth and investment based on cross-country data. In general, the results are largely consistent with the positive impact of trade on economic growth as found in the literature. However, the empirical results based on different...
Understanding crude oil import demand behaviour in Africa: The Ghana case
Pages: 75 - 87
As in many African countries, crude oil importation is a major drain on the economy of Ghana. We estimate short-run and long-run import demand models for crude oil using data over the period 1980–2012. Results show that demand for crude oil is price inelastic in the short-run but elastic in the long-run....
Considerations for Rules of Origin under the African Continental Free Trade Area
Landry Signé, Payce Madden
Pages: 77 - 87
Rules of origin are used to determine a product’s eligibility for preferential tariffs under a free trade agreement and have major implications for the extent of trade under the agreement and the growth of regional value chains. Firms choose to comply with rules of origin when the benefits of trading...
The Impact of Regional Integration on Africa’s Manufacturing Exports
Pages: 81 - 87
This paper analyses the impact of Regional Trade Agreements (RTAs) on intraregional manufactured exports in Africa. Using data from 1990 to 2015 for 45 African countries, a structural gravity model was estimated using the Poisson pseudo maximum likelihood estimator that controlled for heteroscedasticity...
Regional Developmentalism in West Africa: The Case for Commodity-based Industrialization through Regional Cooperation in the Cocoa–Chocolate Sector
Jonathan Bashi Rudahindwa, Sophie van Huellen
Pages: 82 - 95
Regional integration occupies a prominent place in the economic policies of most sub-Saharan African countries. However, despite different waves of initiatives across the African continent, the majority of African regional schemes have not managed to achieve their ambitious goal of promoting sustainable...
Structural change and industrial policy: A case study of Ethiopia’s leather sector
Pages: 85 - 100
Recent empirical evidence underscores the vital role of industrial development in fostering structural change and promoting a country’s long-run development objectives. Devising sound industrial policy institutions emerges as a key policy option to promote the reallocation of human, physical and financial...
Sovereign bond issues: Do African countries pay more to borrow?☆
Michael Olabisi, Howard Stein
Pages: 87 - 109
There is a new wave of external borrowing by African governments on private sovereign bond markets. The findings in this paper indicate that African economies pay higher-than-normal coupon rates on these markets; observed risk measures like agency ratings and debt to GDP ratios do not explain the deviation...
Reaping the AfCFTA Potential Through Well-Functioning Rules of Origin
Komi Tsowou, Junior Davis
Pages: 88 - 102
The African Continental Free Trade Area (AfCFTA) Rules of Origin (RoOs) determine the conditions for the application of the Agreement’s tariff preferences. The effectiveness of existing preferential trade agreements within the continent is undermined by heterogeneous RoO regimes and costly trade facilitation...
Rules of Origin across African Regional Trading Agreements: A Landscape with Measures to Address Challenges at Harmonization☆
Julien Gourdon, Dzmitry Kniahin, Jaime de Melo, Mondher Mimouni
Pages: 96 - 108
To become operational, the African Continental Free Trade Area (AfCFTA) must harmonize Rules of Origin (ROO) across Africa’s Preferential Trade Agreements (PTAs) along two dimensions: regime-wide rules and product-specific rules. This paper describes and evaluates these ROO across the major multiple-membership...
ECOWAS and AfCFTA: Potential Short-Run Impact of a Draft ECOWAS Tariff Offer
Peter Lunenborg, Thomas Roberts
Pages: 103 - 114
This study provides an ex ante short-run impact analysis of tariff liberalisation in the context of the African Continental Free Trade Area (AfCFTA) on the Economic Community of West African States (ECOWAS) customs union regarding tariff revenue and import values. As with other customs union on the continent,...
Proving Hegel Wrong: Learning the Right Lessons from European Integration for the African Continental Free Trade Area
Pages: 115 - 132
This paper sets out to disprove the German philosopher Hegel’s dictum about people learning nothing from history, by looking at the lessons to be learned for the African Continental Free Trade Area (AfCFTA) from the European Union’s experience of regional integration. Since its foundation in 1957, European...