This paper investigates the roles of economic integrations (EIs) in the development of trade within Africa region vis-à-vis Africa’s trade with the rest of the world. Specifically, we examine how the removal of trade barriers could eventually lead to harmonization of trade policies in Africa and in turn the growth of trade between the member countries. Our study focuses on a 20-year period in which we observe that as the domestic markets for the developing economies continue to expand, the expected trend is that their export competitiveness will also expand. However, data shows that while African Nations put EIs at the core of their development, only 10 percent of total value of African trade is intra-African in nature, and 90 percent is with countries outside the region. Using a gravity model adapted for African context, our analysis indicates that streamlining and employing similar policies encouraged and promoted trade. As trade entails the interaction of many other sectors, our results imply that policy reforms to deepen their economic integrations should proceed at a faster rate to stimulate investment flows from both intra-regional and extra-regional sources in addition to the diversification of products for export.

Keywords:
Bilateral Agreements, Economic Integrations, Gravity Model, Intra-Africa Trade, Trade, Tariff and Non-Tariff Barriers