Trading Through Climate Risks: The Impact of Climate Change Vulnerability on Intra‐African Trade

This paper examines the effects of climate change vulnerability on intra‐African trade using data for 48 Sub‐Saharan African countries over the period 2000–2018. Employing a structural gravity model, we investigate how exposure to climate risks, sensitivity, and adaptive capacity influence bilateral trade flows. Our findings indicate that higher climate vulnerability significantly reduces intra‐African exports and imports, with the strongest adverse effects observed for manufactured goods. Sectoral analysis reveals that vulnerability related to infrastructure, ecosystems, and food security is the main channel through which climate change constrains trade. We also observe substantial regional heterogeneity, with West African countries experiencing the largest trade losses due to their high climate exposure and limited adaptive capacity. Robustness analyses show that the negative effect of exporter vulnerability remains consistent, whereas the impact of importer vulnerability is more heterogeneous across samples. These findings highlight the importance of investing in climate‐resilient infrastructure and strengthening adaptive capacity to support intra‐African trade and enhance the effectiveness of the African Continental Free Trade Area (AfCFTA).