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

Author: Vigninou Gammadigbe

Volume/Issue: Volume 2021 Issue 019

Publication date: January 2021

ISBN: 9781513567716

$18.00

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Topics covered in this book

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Exports and Imports , Economics- Macroeconomics , economic growth , income convergence , Africa , WP , trade intensity , growth rate , bilateral trade intensity , country pair , further trade integration , trade integration indicator , trade openness , trade openness of the country pair , trade statistics

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Summary

The main objective of Regional Trade Agreements (RTAs) is to stimulate economic growth in participating countries through increased trade, economies of scale, knowledge and technology transfer. Using a panel data over the period 1979 to 2018, this paper examines the contribution of regional trade integration (RTI) to economic growth and income convergence in Africa and its major Regional Economic Communities (RECs). The results of the instrumental variable and panel fixed-effects estimation show that RTI promotes economic growth in Africa. However, it fosters income divergence, reflecting the distribution of the gains from regional integration in favor of the more developed economies of the continent. The results of this study show the importance to support the African Continental Free Trade Area (AfCFTA) project with policies aimed at reducing non-tariff barriers to trade and improving infrastructure in order to maximize the effects on growth in all participating countries.