roads alone and for the combination of roads, ports and land borders. For each of these networks we obtain a new matrix of transport times between African countries and with the rest of the world. On trade policy, we consolidate the various existing trade agreements in Africa into a new “ambitious” trade agreement, such as the African Continental Free Trade Area (AfCFTA). Then we simulate the single and combined impact of these reforms on trade and gross domestic product of African economies. We show that an ambitious trade agreement would increase African countries’ exports by an average of 3.6 percent and their GDP by 0.6 percent. Complementing trade integration by reducing transportation time on roads, ports and border posts would increase exports by 11.5 percent and GDP by 2 percent. These results suggest that infrastructure improvements are essential to reap the full benefits of the AfCFTA.

Our paper draws on several strands of research. First, there is a growing body of literature that examines the impact of transportation infrastructure projects on transportation costs, including Donaldson & Hornbeck (2016), Donaldson (2018), Fajgelbaum & Redding (2022), Allen & Arkolakis (2022), and Fan, Lu & Luo (2023). While most of this research focuses on one country and one transportation network, our work covers most African countries (and the rest of the world) and considers roads, ports and land borders simultaneously. A related stream of research examines the impact of transportation costs on exports as mediated by infrastructure, (Limao & Venables 2001, Martincus, Carballo & Cusolito 2017).<sup>1</sup> A second strand of literature aims to quantify the income gains from new transportation infrastructure using general equilibrium models of trade (Co ̧sar & Fajgelbaum 2016, Fajgelbaum & Schaal 2020). We use on a general equilibrium model of an endowment economy to uncover the trade and income effects of a fall in the cost of trade that induces a reshaping of the geography of trade flows. This fall in the trade cost is the result of a combination of regulatory change (a regional trade agreement) and infrastructure investment.

Third, trade models have been used extensively to quantify the effects of trade agreements (see Lim ̄ao 2016 for a survey), including recent Structural Gravity General Equilibrium models (Anderson & Yotov 2016, Fontagn ́e & Santoni 2021, Fontagn ́e et al. 2023), New Quantitative Trade Models (Costinot & Rodr ́ıguez-Clare 2014, Caliendo & Parro 2015) and Computable General Equilibrium models.<sup>2</sup> While most papers examine the impact of infrastructure investment and trade reforms in isolation, we quantify their combined impact for Africa.

Finally, by combining GIS analysis and trade modeling, our work relates to a final stream of research that uses granular geographic data to shed light on the consequences of major infrastructure projects. The analysis of China’s Belt and Road Initiative is a recent and striking example of this (de Soyres, Mulabdic & Ruta 2020, Baniya, Rocha & Ruta 2020, Bird, Lebrand & Venables 2020, Lall & Lebrand 2020). We depart from the latter works in three ways: (i) we extend the transportation network developed by de Soyres, Mulabdic, Murray, Rocha & Ruta (2019) to the entire African continent for both regional and international transportation; this provides us with an ideal setup for quantifying the effect of a change in relative trade costs. (ii) We expand the types of transportation projects analyzed. (iii) We use a structural gravity general equilibrium approach

> 1A related but distinct line of research studies the impact of infrastructure development on allocative efficiency in developing economies. Asturias, Garc ́ıa-Santana & Ramos (2019) use plant-level data and focus on domestic sales in India, while we use multi-country aggregate data and consider domestic and international sales.

> 2Examples of recent applications of New Quantitative Trade Model (NQTM) and Computable General Equilibrium models (CGE) to the Africa region are presented in the following studies Abrego, Amado, Gursoy, Nicholls & Perez-Saiz (2019) (for NQTM) and Bengoa, Mathur, Narayanan & Norberg (2021), World Bank (2020), African Development Bank (2019) (for CGE).

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