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Orientation: Although all African governments recognise the importance of stimulating greater intra-regional trade, the process of turning policy into action has proved to be difficult. Research purpose: Several studies have examined the broad effects of free trade areas in Africa and how the removal of tariffs and other trade barriers impacts member countries. However, no studies appear to have been conducted on the effects of a targeted reduction in trade divisions based on untapped export potential. Motivation for the study: Many divisions stifle trade on the African continent, from limited market access and poor infrastructure to unwieldy regulatory frameworks and a lack of information on trade opportunities that hinder greater intra-regional trade. Research approach/design and method: This study sets out to address the research gap by translating the potential trade values of the identified untapped intra-regional trade opportunities between African countries into (Global Trade Analysis Project) GTAP model shocks. This involved determining what the increase in trade efficiency (or reduction in trade divisions) must be, in addition to the removal of all tariffs, to deliver the estimated potential increase in trade for the identified trade opportunities. Main findings: The study found that in addition to the removal of tariffs, targeted increases in trade efficiency phased in over time produce much higher economic gains than a once-off trade efficiency shock. Practical/managerial implications: The welfare gains of many of the smaller African economies are higher under this phased approach, and it is not mostly the bigger, more industrialised economies that benefit most. Contribution/value-add: The results cast new light on the potential of African countries to leverage untapped trade opportunities to increase intra-regional trade among small and large economies alike.

Background: One of the most compelling arguments for regional trade and integration in Africa is that the African market is the most fragmented in the world, with only 16% of trade being within the continent. Furthermore, with 14 regional economic communities (RECs), the scale of integrated trading compared to the magnitude of trade is cause for concern. Africa could soon witness an important milestone on its path towards increased regional trade and improved integration with the implementation of the Tripartite Free Trade Agreement (TFTA) involving 26 countries. However, addressing overlapping memberships of the RECs and streamlining regulations, customs and border procedures can be a lengthy process. Aim: In the meantime, this study aims to identify specific intra-regional trade opportunities among African countries to inform a more targeted approach to regional trade. Methods: This article uses a unique approach based on the Decision Support Model (DSM) to identify intra-regional trade opportunities between the TFTA countries, taking into account each country’s import demand and export supply. Results: We determined 334 such opportunities among the 26 countries, of which 232 (almost 70%) are newly recognised as not being exploited. Conclusion: This economic potential calls for policymakers to take a more proactive approach in their actions and recommendations by targeting these trade opportunities.

Upon South Africa’s transition to democracy in 1994, there were great hopes for an economic revival in the country, underpinned by supportive economic policies that prioritised job creation and the elimination of longstanding poverty and inequality. Until now, the efficacy of economic policy in bringing about these much-coveted outcomes – particularly improvements on the employment front – has received little attention. This paper ventures into relatively uncharted territory by analysing how political dynamics and accompanying economic policy frameworks have impacted the structure and momentum of employment growth in South Africa over the past two decades. This is achieved by examining the changes in employment and, more specifically, the changes in the cost-neutral change in the capital-to-labour (K/L) ratio from 1995 to 2013. For the purpose of the analysis, a dynamic CGE model of the South African economy is used, with the focus being primarily on changes in the capital and labour markets during the period in question across a range of sectors. Among the results are that there was an increase in capital relative to labour (K/L) during the period, despite there being an increase in the rental price of capital relative to wages (PK/PL). The results suggest that at any given ratio of real wages relative to the rental price of capital, industries would choose a K/L ratio 8.1% higher in 2013 than in 1995. The study offers new insights into what is hampering employment in South Africa, which has been eroding the economy’s productive base and prompting serious questions about the country’s growth prospects. Clearly, South Africa needs a well-informed and responsive economic policy framework if it is to escape the potentially explosive unemployment crisis in which it has long been mired.