AfCFTA and the Extensive Margin of Ghanaian Exports: Evidence on Product Diversification, Market Entry, and Survival

This paper examines the effects of the African Continental Free Trade Area (AfCFTA) on the dynamics of Ghana's exports using highly disaggregated HS6-product data covering 196 destination markets. Moving beyond aggregate trade flows, the analysis investigates the impact of AfCFTA on the intensive, extensive, entry, exit, and survival margins of trade. Estimating the extensive margin within a gravity framework with PPML, which is well-suited to handling zero trade flow and heteroskedasticity, the results indicate that AfCFTA has strengthened Ghana's export performance by expanding market participation, encouraging entry into new destination-product markets, reducing export exits, and improving the persistence of export relationships. A series of robustness checks, including alternative treatment years, major commodity exclusions, and event-study analyses, confirm the stability of the findings. The results suggest that the gains from AfCFTA extend beyond higher trade volumes to encompass export diversification and the sustainability of export relationships, highlighting the Agreement's potential to support Ghana's long-term trade integration and structural transformation.