Impact of SADC Free Trade Area on Southern Africa’s Intra-Trade Performance: Implications for the African Continental Free Trade Area
Year: 2023
Type: article
Abstract: The main raison d’être of the Southern African Development Community (SADC) Free Trade Area (FTA) implemented in 2012 was to inter alia boost intra-regional trade and promote regional trade integration. The low levels of growth and mixed trade performance of countries, eight years after, raises questions about the success of the FTA. The success of the recently launched African Continental Free Trade Area (AfCFTA) partly hinges on the performance of the regional FTAs like the SADC FTA. This is because it is unlikely that the African Union through the AfCFTA will achieve continentally what regional economic communities failed to achieve at the regional level. We use a gravity model as well as the difference in difference estimator to evaluate, ex-post, the impact of the SADC FTA on total and sectoral intra-exports. Using data from 2001 to 2019, results show that the full implementation of the SADC FTA did not significantly affect export performance with the export difference between countries that joined the FTA and those that did not being insignificant. These results do not change even when using sectoral exports. JEL Codes: F1, F13, F14, F15
Source: Foreign Trade Review
Author: Busani Moyo
Institution: University of South Africa
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,000
OpenAlex ID: W4386401714