REGIONAL INTEGRATION IN WEST AFRICA: COSTS, TRADEOFFS AND INTEGRATION BETWEEN GHANAIAN AND BURKINABE FRESH TOMATO MARKETS

Abstract

Trade flow difficulties across international borders in Sub-Saharan Africa represent a fundamental disincentive to cross-border arbitrage, price transmission and market integration. Despite the above observations, little research has so far undertaken a disaggregated view of the benefits of cross-border trade between neighbouring countries in Africa by comprehensively studying the price dynamics, transaction cost, rents to arbitrageurs and the spatial integration of the markets involved. The major objective of this paper is therefore to cast light on these issues by examining the drivers of the crossborder trade between Ghanaian consumer and Burkinabe producer markets of fresh tomato and what these imply for the integration of markets across the border. Our findings reveal a high level of tradability, rents to arbitrageurs and above 10% transmission of prices between the two markets across the border between Ghana and Burkina-Faso. The findings have theoretical and practical relevance for cross-border trade in West Africa.