Trade and Infrastructure Integration in Africa

Economic integration of the African continent rests on two pillars: the ratification of an ambitious trade agreement and massive investment in transportation infrastructure. Leveraging a newly created city-level database on African exporters’ transport times, transport route optimization and general equilibrium modeling of international trade, the paper quantifies the impact of greater trade and transport integration in Africa. A pan-African agreement, such as the African Continental Free Trade Area, would increase African countries’ exports by an average of 3.4 percent and increase gross domestic product by 0.6 percent. Complementing trade integration by reducing transportation time on roads, ports and border posts would increase exports by 11.5 percent and increase gross domestic product by 2 percent. Major transport investments are necessary to reap the full benefits of the African Continental Free Trade Area.