Promoting sustainable and inclusive trade by exploring untapped intra-regional trade opportunities in Africa

Abstract

Greater regional trade integration has been a policy priority in Africa for many years, yet intra-regional trade on the continent remains very low by world standards. Enhanced trade has the potential to drive Africa’s development through greater productivity, industrialisation, innovation and job creation. However, the continent faces many obstacles in its trade efforts, including high trade cost, poor infrastructure and insufficient market information. If Africa does not address its fundamental problems head-on, the chances of meaningful development and stronger regional integration are slim. This study explores the constraints that may impede trade in untapped intra-regional trade opportunities among the member countries of the Tripartite Free Trade Area (TFTA), identified using international market selection techniques, notably the decision support model (DSM), as well as competitiveness analysis tools. The results show that nearly a quarter of the untapped trade opportunities cannot be attributed to
any of the trade barriers investigated, indicating that there is a lack of information on trade opportunities in the region. The study also proposes specific actions that policymakers could take based on the results. Key recommendations include disseminating information on intraregional trade opportunities to key stakeholders, renegotiating tariffs that hinder cross-border trade and the realisation of intra-regional trade potential, and driving the ongoing collection of information on non-tariff measures.