Economists are severely underestimating the amount of trade between African countries

The share of internal trade in Africa remains low, as reflected by official statistics. This is despite numerous regional trade agreements that have led to tariffs removal within the trading blocs. At least in principle.

There are a host of shortcomings that limit trade: non-tariffs barriers, red tape and insufficient infrastructure. Tariff barriers remain high outside areas covered by the agreements. Enhancing trade integration between African countries could yield large economic gains. This idea motivated the latest initiative for integration, the continental free trade area.

However, a large part of cross-border trade between African countries is informal. It either avoids customs entirely, or goes through official posts but is not recorded. Informal trade is difficult to measure. Most studies have relied on estimates based on partial surveys, or on accounting exercises. They concluded that a substantial share of Africa’s regional trade was informal, on the order of 30% to 40%.


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