Analyzing the trade creation and diversion impacts of regional trade agreements in Africa

Regional trade agreements (RTAs) have been expanding globally, and Africa is no exception. RTAs are considered a crucial strategy for transforming Africa’s fragmented small economies. As a result, of numerous multilateral trade agreements in different regions of Africa. This study explores the trade creation and trade diversion effects associated with regional trade agreements (RTAs) in Africa. By employing gravity models, it analyzes trade data from 42 African countries across 11 RTAs, utilizing an updated bilateral trade dataset developed from the IMF's Direction of Trade Statistics. The research evaluates the impact of RTAs on trade between member countries by comparing parameter estimates from different models and applying ordinary least squares (OLS) regression techniques. The results reveal that the establishment of these RTAs. It utilizes gravity models to analyze trade data from 42 African countries and 11 RTAs, building A revised bilateral trade dataset compiled using the IMF's Direction of Trade Statistics. The study compares and analyzes parameter estimates from various models that assess the impact of RTAs on partner trade, using ordinary least squares (OLS) regression. Findings from the research show that even though the formation of these RTAs has contributed to increased trade in the African region, trade among the different agreements remains relatively low.