Do Liberal Trade Norms Deflect Intra-African Trade? Evidence from Ghana

Despite decades of liberalization and regional trade initiatives, intra-African trade remains persistently low, with external markets often prioritized over regional exchange. This study advances a novel explanation for Africa’s undertrading by conceptualizing trade openness not merely as a technical policy variable but as an expression of liberal economic ideology. Focusing on Ghana and its 34 major African trading partners over the period 1996 to 2020, the paper employs instrumental-variable 2SLS and GMM estimators within a gravity-model framework to isolate ideational effects from conventional economic determinants. The results show that greater trade openness among partner countries systematically reduces Ghanaian exports while increasing imports. This generates an asymmetric pattern of trade deflection in which Ghana loses. These findings demonstrate that when openness is internalized as an ideological norm rather than deployed as a conditional policy instrument, liberalization reorients trade toward global markets at the expense of intra-African exchange. The paper contributes to the literature by linking ideology to observable trade outcomes and highlights that the effectiveness of the AfCFTA depends on complementing liberalization with regionally calibrated, development-oriented trade strategies. Beyond Ghana, the findings suggest that liberal trade norms can subtly reorient African trade toward global markets, underscoring the need for policies that balance openness with regional integration under the AfCFTA. JEL Classification: F14 • F15 • O55 • P45 • C33