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An analysis of Africa’s export performance and export similarity for select countries within the Tripartite Free Trade Area market

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An analysis of Africa’s export performance and export similarity for select countries within the Tripartite Free Trade Area market

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This study discusses the issue of Africa’s export performance and, more specifically, focuses on export competition for South Africa and Kenya in the envisaged COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) which was launched on 12 June 2011 at a summit in Johannesburg, South Africa.

The motivation behind this analysis is based on the premise that the apparent objective behind the trade strategies being adopted by African countries is to achieve a number of goals such as to create a competitive environment and achieve sustainable economic growth and development, with emphasis being placed on increasing exports. In this process, the TFTA will be the continent's biggest FTA comprising 26 countries spanning from Cape Town to Cairo with an estimated market potential of US$ 1 trillion.

This study investigates the degree of South Africa and Kenya’s export similarity with those of various exporters to the TFTA market. Calculating export similarity is useful in determining the similarity or dissimilarity of countries in terms of their export compositions. To achieve this, the Export Similarity Index (ESI) proposed by Finger and Kreinin (1979) is used. The various countries considered in this analysis include both developing and developed countries. This comparison serves two purposes: (i) analysing the similarity of South Africa and Kenya’s exports with those of other major developing countries provides a measure of how directly these countries compete with RSA and Kenya in the TFTA market; and (ii) the comparison with developed countries offers an indication of the level of sophistication of their exports.


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An analysis of Africa's export performance and export similarity for select countries within the Tripartite Free Trade Area market - Author(s): Taku Fundira

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