The employment effects of intra‐African exports

Abstract

The establishment of the continental free trade area in Africa is an important step forward for the creation of a market of significant size in a context of sluggish job creation. This study examines the effects of intra‐African exports on aggregate and sectoral employment using the fixed‐effects model with Driscoll‐Kraay standard errors. The data covers 44 African countries over the period 1995–2018. The results show that intra‐African exports increase both sectoral and aggregate employment. Despite the marginal size of intra‐African trade, its effect on employment is greater than that of extra‐African exports. Our results also show that intra‐African exports of primary products create jobs in the agricultural sector, while its effect on employment in the two other sectors is not statistically significant. African countries should therefore increase employment through higher processing of primary products.

Growth, fiscal and welfare implications of trade liberalization in Africa: A macro‐micro modeling assessment of the Senegalese economy

“…Fouda Ekobena et al ( 2021) confirm that AfCFTA's tariff reduction leads to short-term revenue decreases in some Central African countries, with a focus on macroeconomic rather than distributional aspects such as income and welfare. Poumie et al (2022) use a fixed-effects model to examine the effects of intra-African exports on aggregate and sectoral employment, revealing an increase in both. A few studies-for example, Sall and Ramos (2021)-have assessed the impact of trade liberalization on the Senegalese economy using the static applied general equilibrium (STAGE) model.…”

“…Poumie et al (2022) use a fixed‐effects model to examine the effects of intra‐African exports on aggregate and sectoral employment, revealing an increase in both. A few studies—for example, Sall and Ramos (2021)—have assessed the impact of trade liberalization on the Senegalese economy using the static applied general equilibrium (STAGE) model.…”

Determinants of intra‐COMESA trade in services

“…Greater intra‐African trade is associated with increased participation in global value chains and more aggregate and sectoral employment (Efogo, 2020; Poumie et al, 2022). The steady rise in services trade is particularly apparent in Africa, where the sector outpaces the manufacturing and agricultural sectors in contributing to most countries' GDP and employment (Ayoki, 2018; van der Marel & Shepherd, 2020).…”