Theories of International trade: perspectives from Africa

This chapter provides a comprehensive review of classical and modern theories of international trade, contextualized within the African experience. It begins with foundational theories such as mercantilism, absolute cost advantage, comparative cost advantage, and the Heckscher-Ohlin model, highlighting their historical development and core assumptions. It then transitions to modern firm-based theories including country similarity theory, product life cycle theory, global strategic rivalry, and Porter’s national competitive advantage.
The chapter critiques these theories for being largely Eurocentric and argues that their assumptions—such as perfect competition, infrastructure, and institutional support—do not align with the realities of African economies. It identifies key challenges in Africa such as poor infrastructure, similar climatic conditions, weak institutional frameworks, and limited capacity to compete globally.
To address these gaps, the author proposes an Africa Trade Design—a strategic framework for assigning export-product priorities across countries or regions to foster intra-African trade and build competitive advantage. The chapter concludes by emphasizing the need for coordinated regional strategies to make the African Continental Free Trade Area (AfCFTA) more effective.