Can WTO membership boost intra-African trade?

• Published in: Scientific African 2023-09, Vol.21, p.e01728, Article e01728
• Main Authors: Gulseven, Osman, Salam, Sofiyat Adeola, Alhadi, Amani Abdullah
• Format: Article
• Language: English
• Subjects: Africa; GPML; Gravity model; OLS; PPML; Trade
• ISSN: 2468-2276; 2468-2276
• DOI: 10.1016/j.sciaf.2023.e01728

•African countries need to trade more with each other to promote economic growth.•Trade is positively related to economic size, common language, and common borders.•The population and distance between countries negatively affect trade.•Being a signatory to WTO can promote trade for exporter and importer countries.•Policy measures can be redesigned to promote infrastructure and enhance Pan-African trade. This study uses the modified gravity model to examine the determinants of trade in goods within African countries. The panel data covers the period between 2000 and 2019 for all 54 countries in Africa. The article contributes to the existing literature on trade determinants in Africa, including distance and economic size in the study of bilateral trade, by augmenting the gravity model with the inclusion of WTO membership. The gravity model is applied using three different methods of estimation: Ordinary Least Squares (OLS), Poisson Pseudo Maximum Likelihood (PPML), and Gamma Pseudo Maximum Likelihood (GPML) models. Our findings show that the GDP of both exporters and importers, sharing common language and borders positively affect intra-African trade, while the impact of distance is significantly negative. We also found that being a WTO member significantly enhances international trade between African partner countries. This study can help formulate better trade policies for African countries.