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.