African Continental Integration and Firm Awareness of Trade Policy: Evidence from a Kenyan Pilot Study

This project assesses the importance of an as-yet underappreciated potential barrier to international trade and firm growth: firms being uninformed about trade costs and unaware of trade agreements relevant to their sector. We focus on the recently signed African Continental Free Trade Area (AfCFTA). We present evidence from a pilot study establishing that around half of Kenyan firms are unaware of AfCFTA. We find substantial levels of unawareness even among larger and internationally active firms. This pilot was done in preparation for a larger-scale project combining customs data with a randomized intervention to assess the importance of these information frictions. In addition to showing a substantial lack of information about AfCFTA, we present firms’ assessments of the threats and opportunities of AfCFTA and find that firms are generally optimistic about it. We also present data on the impact of COVID on business performance; more than 82% of Kenyan firms indicated their income declined as a result of the pandemic.