Intra-African Trade and Competitiveness in Africa
Keywords:
Trade, Economic integration, Intra-regional trade, Competitiveness
Abstract
This paper investigates the competitiveness of the African continent by studying the impact of relevant intra-African trade indices on the competitiveness of the continent, based on a panel dataset spanning 2000 to 2016. The results show considerable variations in trade performance and competitiveness. Intra-African trade, especially in exports, over the study period, was consistently low. While the South Africa region had the highest intra-regional trade in imports, East Africa region had the highest level of inter-regional imports. West Africa, with Nigeria’s dominance, had the highest level of intra-regional exports, while South Africa had the highest inter-regional exports at country level. For the Regional Economic Communities (RECs), SADC reported the highest intra-African import trades, while SACU reported the highest inter-regional imports. SADC has the highest intra-African exports, while COMESA has the highest inter-regional exports. African Competitiveness Index (ACI) ranking puts the East Africa region on top, and South Africa as the most competitive African economy. The results were mixed but plausible. All the variables were correctly signed and significant in different regions, reflecting the huge structural and policy disparities among the regions. Continued transformation of African economies with emphasis on both physical and financial infrastructure, and human capital development is advised, as it will enhance intra-African trade and regional competitiveness.
References
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Siudek, T., & Zawojska, A. (2014). Competitiveness in the economic concepts, theories and empirical research. Oeconomia, 13(1), 91-108.
Smit, A. J. (2010). The competitive advantage of nations: is Porter’s Diamond Framework a new theory that explains the international competitiveness of countries? Southern African Business Review, 14(1).
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The Intra-African Trade Fair. (2018). The rationale for the trade fair. Retrieved from https://www.intrafricantradefair.com/home/intra-african-trade-fair-2018
Torres-Reyna, O. (2007). Panel data analysis: Fixed and random effects using Stata (v .4.2) [Powerpoint slides]. Lecture notes, Princeton University, New Jersey.
Ulman, S. (2013). Corruption and national competitiveness in different stages of country development. Procedia Economics and Finance, 6, 150-160.
Viner, J. (2016). Studies in the theory of international trade. Routledge.
Witschge, L. (2018, March 20). African continental free trade area: What you need to know. Aljazeera. Retrieved from https://www.aljazeera.com/news/2018/03/african-continental-free-trade-area-afcfta-180317191954318.html
African economic outlook 2017: Entrepreneurship and industrialisation. Paris: OECD Publications.
African Export-Import Bank. (2017). African trade report: Bridging Africa's trade finance gap through domestic resource mobilization. Cairo: Afreximbank.
Agbor, J. A., & Taiwo, O. (2014). The fundamental determinants of international competitiveness in African countries with special reference to the CFA Franc Zone (Working paper 463). Cape Town: Economic Research Southern Africa.
Akorede, S. (2018, April 20). Shakir Akorede: How a single market would transform Africa's economy. How we Made it in Africa. Retrieved from https://www.howwemadeitinafrica.com/shakir-akorede-how-a-single-market-would-transform-africas-economy/61303/
Atkinson, R. (2013). Competitiveness, innovation and productivity: Clearing up the confusion. Washington, DC: The Information Technology and Innovation Foundation.
Bello, A. S., & Gass, J. (2018, April 3). Who are the winners and losers of Africa's new free trade agreement? [Web log message]. Retrieved from http://www.atlanticcouncil.org/blogs/africasource/who-are-the-winners-and-losers-of-africa-s-new-free-trade-agreement
Cann, O. (2017, September 28). What exactly is economic competitiveness? World Economic Forum.Retrievedfromhttps://www.weforum.org/agenda/2017/09/what-is-economic-competitiveness/
Competitiveness. (2018). In Business Dictionary Online. Retrieved from http://www.businessdictionary.com/definition/competitiveness.html
Economics Online. (2018). Competitiveness. Retrieved from http://www.economicsonline.co.uk/Global_economics/Competitiveness.html
Fatima, N. (2010). Analysing the terms of trade Effect for Pakistan. Working Papers & Research Reports, 2010.
Feenstra, R. C. (2015). Advanced international trade:theory andevidence.Princetonuniversity press.
Gandolfo, G. (2013). International trade theory and policy. Springer Science & Business Media.
Geda, A., & Seid, E. H. (2015). The potential for internal trade and regional integration in Africa. Journal of African Trade, 2, 19-50.
Hachaichi, R., & Ghodbane, S. B. (2014). Empirical analysis of determinants of international competitiveness. International Journal of Business and Social Science, 5(5), 203-209.
Jones, R. W., & Kierzkowski, H. (2018). The role of services in production and international trade: A theoretical framework. World Scientific Book Chapters, 233-253.
Jordaan, A. C. (2014). Regional integration in Africa versus higher levels of intra-Africa trade. Development Southern Africa, 3, 515-534.
Kamar, B., Bakardzhieva, D., Naceur, S. B., & Naceur, M. S. B. (2010). The Impact of Capital and Foreign Exchange Flowson the Competitiveness of Developing Countries (No. 10-154). International Monetary Fund.
Kimenyi, M. S., Lewis, Z. A., & Routman, B. (2012). Introduction: Intra-African trade in context. In Brookings Africa Growth Initiative (Ed.), Accelerating growth through improved intra-African trade (pp. 1-6). Massachusetts: The Brookings Institution.
Latja, A. (2015). Competitiveness and its influence on the trade balance: A study for the Western Balkan. European Scientific Journal, 11(10), 187-193.
Leamer, E. E., & Stern, R. M. (2017). Quantitative international economics. Routledge.
Liu, F., & Xu, H. (2017). Effects of educational efficiency on national competitiveness based on cross-national data. Education Science, 7(81), 1-12.
Masmoudi, M., & Charfi, F. (2013). The macro-economic determinants of export competitiveness of the Tunisian economy in a context of liberalisation and crisis. International Journal of Business and Management Invention, 2(7), 36-49.
Moehr, O., Coles, Z., & Tsiknia, A. (2018, April 12). Africa embraces the promise of free trade [Web log message]. Retrieved from http://www.atlanticcouncil.org/blogs/econographics/ole-moehr-4
Moreno, E. D. (2014, November). The cluster's competitiveness perceived by stakeholders. Paper presented at 17th The Competitiveness Institute Global Conference, Monterrey, Mexico.
Mutunga, S. L. (2014). Perceived effects of selected macroeconomic indicators on sustainable competitive advantage in food and beverage firms in Kenya. European Journal of Business and Management, 6(30), 97-107.
Ossa, R. (2011). A “new trade” theory of GATT/WTO negotiations. Journal of Political Economy, 119(1), 122-152.
Park, H. U.(2011). Practicalguides topaneldatamodeling:A step bystep analysis using Stata. Lecture notes, International University of Japan, Niigata Prefecture.
Rusu, V. D., & Roman, A. (2018). An empirical analysis of factors affecting competitiveness of C.E.E. countries. Economic Research-Ekonomska Istraživanja, 1480969, 1-16.
Sala-i-Martin, X. (2016, September 28). It matters how competitive your country is. Here are three reasons why. World Economic Forum. Retrieved from https://www.weforum.org/agenda/2016/09/it-matters-how-competitive-your-country-is-here-are-three-reasons-why/
Schwab, K., & Sala-i-Martin, X. (2018). The global competitiveness report 2017–2018. Geneva: World Economic Forum.
Shiozawa, Y. (2015). International trade theory and exotic algebras. Evolutionary and Institutional Economics Review, 12(1), 177-212.
Siudek, T., & Zawojska, A. (2014). Competitiveness in the economic concepts, theories and empirical research. Oeconomia, 13(1), 91-108.
Smit, A. J. (2010). The competitive advantage of nations: is Porter’s Diamond Framework a new theory that explains the international competitiveness of countries? Southern African Business Review, 14(1).
Staehr, K., & Vermeulen, R. (2016). How competitiveness shocks affect macroeconomic performance across euro area countries (Working Paper No. 1940). Frankfurt: European Central Bank.
The Competitiveness Institute. (n.d.). What is competitiveness? Retrieved from http://www.tci-network.org/media/download/1185
The Institute for Management Development (IMD) World Competitiveness Center. (2018). The IMD world competitiveness yearbook 2018. Switzerland: IMD.
The Intra-African Trade Fair. (2018). The rationale for the trade fair. Retrieved from https://www.intrafricantradefair.com/home/intra-african-trade-fair-2018
Torres-Reyna, O. (2007). Panel data analysis: Fixed and random effects using Stata (v .4.2) [Powerpoint slides]. Lecture notes, Princeton University, New Jersey.
Ulman, S. (2013). Corruption and national competitiveness in different stages of country development. Procedia Economics and Finance, 6, 150-160.
Viner, J. (2016). Studies in the theory of international trade. Routledge.
Witschge, L. (2018, March 20). African continental free trade area: What you need to know. Aljazeera. Retrieved from https://www.aljazeera.com/news/2018/03/african-continental-free-trade-area-afcfta-180317191954318.html
Published
2020-03-01
Section
Articles
