Potential of AfCFTA to Increase Intra‐African Exports: Method and Application to East African Community

This paper provides a simple method for an African country to identify the markets (countries) and products where it is most likely to be able to increase exports to the rest of Africa under AfCFTA. Given concerns with the effects of climate change in Africa, the method can also provide estimates of the increase in CO2 emissions (that contribute to increasing temperatures) associated with these exports. The only data requirements are current tariffs and export values, with assumptions about import demand elasticities and emissions intensity. The method is restricted to growth of existing exports as this indicates that the country already has export capacity in markets already importing their products and that these products are unlikely to be excluded from liberalisation by importing countries. Application of the method is illustrated with estimates of the potential for East African Community (EAC) member countries to increase exports to other African countries. Results suggest that the EAC could expand exports overall by 10%–15%, largely concentrated in relatively close countries and in agriculture and resource‐based products plus basic manufactures. The implied CO2 elasticity to exports is below unity for Burundi and Kenya, but above unity for Rwanda, Tanzania and Uganda; in all cases, there is a negligible increase in total emissions associated with trade. African countries can anticipate moderate intra‐regional export gains from AfCFTA and, by identifying the markets and products most likely to be affected, the method provides a guide to policymakers on where to target support for exports while minimising any increase in CO2 emissions.