Identifying regional trade potential between selected countries in the African tripartite free trade area

Abstract

Background: One of the most compelling arguments for regional trade and integration in Africa is that the African market is the most fragmented in the world, with only 16% of trade being within the continent. Furthermore, with 14 regional economic communities (RECs), the scale of integrated trading compared to the magnitude of trade is cause for concern. Africa could soon witness an important milestone on its path towards increased regional trade and improved integration with the implementation of the Tripartite Free Trade Agreement (TFTA) involving 26 countries. However, addressing overlapping memberships of the RECs and streamlining regulations, customs and border procedures can be a lengthy process.

Aim: In the meantime, this study aims to identify specific intra-regional trade opportunities among African countries to inform a more targeted approach to regional trade.

Methods: This article uses a unique approach based on the Decision Support Model (DSM) to identify intra-regional trade opportunities between the TFTA countries, taking into account each country’s import demand and export supply.

Results: We determined 334 such opportunities among the 26 countries, of which 232 (almost 70%) are newly recognised as not being exploited.

Conclusion: This economic potential calls for policymakers to take a more proactive approach in their actions and recommendations by targeting these trade opportunities.