Assessing Trade Dynamics and Competitive Positioning within the AfCFTA Amidist Deglobalization

Abstract

Amid the global retreat from interconnected markets, the African Continental Free Trade Area (AfCFTA) appears as a critical counterforce, promising to redefine economic integration in Africa. This study assesses the trade dynamics of eight member countries of the AfCFTA, considered the first initiatives of the trade agreement, tagged Guided Trade Initiative (GTI). The study measured the Trade Intensity Index (TII) and the Revealed Comparative Advantage (RCA) to estimate the trade intensity and competitive advantage among the selected countries. The study later applied the gravity model to estimate expected trade flows and competitive positioning based on economic sizes (GDP) and distances among the member countries within the period 2012 to 2022. The result shows resilience but weak trade flows among GTI countries which could be attributed to geopolitical trade factors, weak infrastructure, and economic factors. The study provides recommendations to strengthen the AfCFTA that promotes increased market activities, economic, and regional integration toward sustainable development.