Is Regional Trade Integration a Growth and Convergence Engine in Africa?

IMF Working Papers, January 29, 2021

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Is Regional Trade Integration a Growth and Convergence Engine in Africa?

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Bibliographic details

• Authors: Vigninou Gammadigbe
• Published: January 29, 2021
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781513567716.001

Summary and objective

• Main objective: Assess whether Regional Trade Agreements (RTAs) stimulate economic growth in participating countries through increased trade, economies of scale, knowledge and technology transfer.
• Empirical scope: Panel data over the period 1979 to 2018.
• Geographic focus: Africa and its major Regional Economic Communities (RECs).

Methodology

• Empirical approach: Instrumental variable and panel fixed-effects estimation.
• Data period: 1979 to 2018.
• Publication format: IMF Working Paper No. 2021/019, Pages: 39, Volume: 2021, Issue: 019.
• Identifiers: DOI: https://doi.org/10.5089/9781513567716.001; ISBN: 9781513567716; ISSN: 1018-5941; Stock No: WPIEA2021019.

Key findings

• RTI effect on growth:
  • Regional trade integration (RTI) promotes economic growth in Africa (as shown by instrumental variable and panel fixed-effects estimation).
• RTI effect on income distribution:
  • RTI fosters income divergence across countries, reflecting that gains from regional integration accrue in favor of the more developed economies of the continent.

Policy implications and recommendations

• To maximize growth effects of the African Continental Free Trade Area (AfCFTA) for all participating countries, the study highlights the importance of:
  • Reducing non-tariff barriers to trade.
  • Improving infrastructure.

Subject tags and keywords (as provided)

• Subject: Economic integration; Personal income; Plurilateral trade; Regional integration; Trade integration.
• Keywords: Africa; bilateral trade intensity; country pair; economic growth; further trade integration; growth rate; income convergence; trade integration indicator; trade intensity; trade openness; trade openness of the country pair; trade statistics; WP.

Vigninou Gammadigbe, "Is Regional Trade Integration a Growth and Convergence Engine in Africa?", IMF Working Paper No. 2021/019 (2021).

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