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GTAP Resource #7144

"Effects of Trade Facilitation on Trade Performance in Africa: Implication for Agri-food Sector"
by Takpara, Moukaila Mouzamilou

International trade is now an embodiment of the new order of the global economy, as it ensures the movement of goods and services, and the factors involved in the production of these goods and services from one country to the other. In this paper, we analyze the effect of trade facilitation on trade performance in Africa with a focus on agri-food trade using a structural gravity model. For our first objective, we use the principal component analysis to construct four aggregate indicators of trade facilitation in African countries over the period 2007-2020. The second objective establishes the role of digital trade policies captured by the Regional Digital Trade Integration Index (RDTII) and the Digital Service Trade Restrictiveness Index (DSTRI) on trade in goods and services respectively in Africa. The results with Poisson Pseudo-Maximum Likelihood (PPML) method show that facilitating trade improves trade performance in Africa. Specifically, trade facilitation indicators such as physical infrastructure and Information Communication Technology (ICT) positively and significantly affect Africa’s trade in goods, specifically in the agrifood sector. More interestingly, the results underscore that the better the level of trade facilitation, the larger the extent of trade flows. Findings also show that less conducive environment for digital trade assessed through RDTII and DSTRI negatively affect Africa’s trade in goods and trade in services, respectively. These findings indicate that African governments should facilitate trade through the reduction of trade cost for better trade performance. Moreover, our findings underscore the importance of digital trade policies in boosting intra-African trade and therefore call for the adoption, domestication, and effective subsequent implementation of the AfCFTA Digital Trade Protocol.

Resource Details (Export Citation) GTAP Keywords
Category: 2024 Conference Paper
Status: Not published
By/In: Presented during the 27th Annual Conference on Global Economic Analysis (Fort Collins, Colorado, USA)
Date: 2024
Created: Takpara, M. (4/4/2024)
Updated: Takpara, M. (4/4/2024)
Visits: 57
- Agricultural policies
- Non-Tariff barriers
- Econometric methods
- Africa (Central)
- Africa (East)
- Africa (North)
- Africa (Southern)
- Africa (West)

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