Intra-African immigration and Africa’s external performance

Contrary to popular belief, the majority of Africans who leave their country remain in Africa and contribute to shaping the economic performance of the continent. This paper investigates the effects of intra-African immigration on the current account in African countries over the past thirty years. To this end, we use a panel data approach and a gravity-based 2SLS estimation strategy to overcome the potential endogeneity bias. We find that intra-African immigration has a positive, strong and robust impact on the current account of African countries. In particular, intra-African immigration contributes to significantly improve the trade balance of African countries, including inside and outside the continent. Further investigations reveal that the strengthening of intra-African trade or the reduction of trade extroversion as well as the demographic vitality favoured by intra-African immigration are the mechanisms behind these results. Thus, full implementation of the African Union protocol on free movement of people between countries can deepen regional integration and help reduce structural current account deficits that countries face.