Abstract
This paper aims to find export, import and total trade determinants potential of Africa by using panel data method in analysis process from gravity model approach for 35years observations from 1980 to 2015. The previous results on trade potential based in panel data set estimated with the fixed /random model. It is methodology used to evaluate Africa exports potential in a period characterized by strong restrictions on trade, based on the estimates generated by a gravity model for Southern and western African Development Community member countries and their exports to China and the rest of the world. The study purpose is to compare Africa potential trade with partners include China, random effects, fixed effects models are used to estimate data analysis with Hausman test for testing equation and prediction alpha for all variables has been used. Data analysis results show that the potential trade was highly significant at 1 % level (3.80***) between China and ECOWAS countries and significant at 5 % level in SADC countries (3.86**). In terms of partnership, the potential trade was highly significant from EU to ECOWAS/SADC with 5 % level compared to JAPAN and USA. In terms of international trade potential, from Figure 7, the prediction values have been standard from 1980 to 1990, due in fact of factory level in these countries judged very low at that period and stated increasing from 2000 to 2020. It should be conclude that From 2000 to 2018.
Highlights
Most part developed countries, economic growth and economy stability is due the high level of international and intra-regional trade motivated by good economic substructure
High trade cost has a negative impact on a country economic showing in several ways data and evidence suggest that African countries have some of the highest trade costs in the world. whereas trade is an important operator of growth and substructure is a necessity for trade, substructure development has a key role to play in economic development
In the case of traditional variables, the results show the signs expected in accordance with the theory
Summary
Economic growth and economy stability is due the high level of international and intra-regional trade motivated by good economic substructure. According to [1], Regional integration trade is the process which two or more states give agreements to cooperate and work closely together to achieve peace, stability and wealth. According to [2], Poor infrastructure and institutions contribute to high trade cost within sub Saharan countries. Whereas trade is an important operator of growth and substructure is a necessity for trade, substructure development has a key role to play in economic development. Based on trade, industrial improve and afterwards the manufacture of products to sell abroad, have increased China’s trade relationships with developed and developing countries
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