Trade Liberalization and Economic Growth in Sub-Saharan African Countries

Aderoju Bolanle Rahmon and Campbell Omolara Ayotunde
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Aderoju Bolanle Rahmon: Department of Economics, School of Arts and Social Sciences, Oyo State College of Education, Lanlate
Campbell Omolara Ayotunde: Department of Economics and Development Studies, Faculty of Management and Social Sciences Lead City University, Ibadan

Lead City Journal of the Social Sciences (LCJSS), 2025, vol. 10, issue 3, 38-54

Abstract: This study empirically examined the effect of trade liberalization on economic growth in Sub Saharan African countries over the period 2000 to 2022 using panel data obtained from World Development Indicator (WDI) database. Pooled Ordinary Least Square (POLS), Fixed Effect Model (FEM) and Two-Step Difference Generalized Method of Moments (TSDGMM) were the estimating techniques employed in analyzing the data. Empirical findings from the study revealed that trade liberalization (TLIB) had a statistically significant positive relationship with economic growth in Sub-Saharan African countries. The results further showed that net foreign direct investment (NFDI), total population (TPOP) and inflation rate (INFR) had statistically significant positive relationships with economic growth while gross fixed capital formation (GCF) and labour force (LABF) exerted statistically significant negative contributions to economic growth of SSA countries. Based on the estimated results, governments of Sub Saharan African countries should strengthen their domestic institutions, particularly those related to governance and contract enforcement; and there should be massive investment in infrastructure and human capital development to support trade and enhance overall economic performance. In addition, implementation of complementary policies that address potential challenges and enhance the benefits of trade liberalization must be vigorously pursued

Keywords: Trade liberalization; Economic growth; pooled ordinary least squares; fixed effect model; Two-step difference GMM; Sub-Saharan Africa (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ris:lcjsss:021944

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