The Role of AfCFTA in Export Diversification: A Causal Analysis of Trade Patterns in Africa

Aim: This study aimed to evaluate the causal impact of the African Continental Free Trade Area (AfCFTA) on export diversification across 36 African countries. Methods: Using panel data from 2015 to 2023, the study applied the synthetic control method to compare trade patterns before and after AfCFTA implementation. Results: The results show that, in the short term, AfCFTA reinforced existing trade relationships with established partners, leading to increased export concentration rather than immediate diversification (effect size = 1.24, p < 0.01). Robustness checks using standardized placebo tests confirm these findings (p = 0.46), suggesting that the observed outcomes are not due to random variation. Conclusion: While AfCFTA holds promise for fostering intra-African trade, the findings underscore structural constraints that may delay short-term diversification. Recommendation: The study recommends strengthening trade facilitation, infrastructure, and SME support to accelerate progress.