ECONOMIC PERFORMANCE OF REGIONAL TRADE BLOCS IN AFRICA
DOI:
https://doi.org/10.7251/ZREFIS2530033TKeywords:
Economic performance, trade blocs, trade integration, Africa, ARDLAbstract
Despite the spread of trade blocs in Africa, the volume of intra-regional trade remained low. Meanwhile, study on the uneven growth patterns of trade blocs in Africa is scarce. This study analyses the economic performance of regional trade blocs in Africa.The time series data on four trade blocs were sourced from United Nations Conference Trade and Development databases from 1995 to 2022. The study employed the Autoregressive Distributed Lag approach.The result shows that while intra trade does not affect economic performance across the trade blocs, extra-trade shows a negative significant effect in Economic Community of West African States (ECOWAS) and a positive effect in Economic Community of Central African States (ECCAS) in the short run. Although, in the long run, intra-trade does not affect on economic performance across the trade blocs, extra trade show a positive significant effect only in ECCAS. The study submitted that the economic performance of trade blocs in Africa is not uniform, while ECCAS benefited from both intra trade and extra trade, the performance of other trade blocs is not impacted by both component of trade in both the short and long run except in ECOWAS which suffers a negative short run effect of extra trade. Policymakers need to promote intra-regional trade by streamlining customs procedures and fosteringconducive business environment. Also, there is need to explore new markets and trading opportunities both with members and with other trade blocs in Africa. The study contributes to a broader understanding of the differences and similarities in trade effects across different regions.References
Adagidede, Isaac Prince, Mohammed Ibrahim, and Yaw Asamoah Sare. 2020. “Structural Transformation in the Presence of Trade and Financial Integration in Sub-Saharan Africa.” Central Bank Review 20: 21–31.
Ampofo, George K., Jing Cheng, Daniel A. Asante, and Peter Bosah. 2020. “Total Natural Resource Rents, Trade Openness and Economic Growth in the Top Mineral-Rich Countries: New Evidence from Nonlinear and Asymmetric Analysis.” Resources Policy 68: 101710.
Arribas, Iván, Said Bensassi, and Emili Tortosa-Ausina. 2020. “Trade Integration in the European Union: Openness, Interconnectedness, and Distance.” North American Journal of Economics and Finance 52: 101167.
Awad, Abla. 2019. “Does Economic Integration Damage or Benefit the Environment? Africa‟s Experience.” Energy Policy 132: 991–999.
Baier, Scott L., Jeffrey H. Bergstrand, and Michael W. Clance. 2007. “Countries, Regions and Trade: On the Welfare Impacts of Economic Integration.” European Economic Review 51: 1277–1301.
Baier, Scott L., Jeffrey H. Bergstrand, and Michael W. Clance. 2018. “Heterogeneous Effects of Economic Integration Agreements.” Journal of Development Economics 135: 587–608.
Baier, Scott L., Jeffrey H. Bergstrand, and Minfeng Feng. 2014. “Economic Integration Agreements and the Margins of International Trade.” Journal of International Economics xxx: xxx–xxx.
Behrens, Kristian, Clémentine Gaigne, Gianmarco Ottaviano, and Jacques-François Thisse. 2007. “Countries, Regions and Trade: On the Welfare Impacts of Economic Integration.” European Economic Review 51: 1277–1301.
Belloumi, Mohamed. 2014. “The Relationship Between Trade, FDI and Economic Growth in Tunisia: An Application of the Autoregressive Distributed Lag Model.” Economic Systems 38: 269–287.
Bento, José P. C., and Vítor Moutinho. 2016. “Examining the Validity of the EKC Hypothesis in Italy by Integrating Renewable and Sustainable Energy.” Renewable and Sustainable Energy Reviews 55: 142–155.
Católica, Carlos, Patricia Católica, and Claudia D. Perú. 2012. “The Impact of Financial Development and Trade on the Economic Growth of Bolivia.” Journal of Applied Economics XV (1): 51–70.
Chambet, Anne, and Robert Gibson. 2008. “Financial Integration, Economic Instability and Trade Structure in Emerging Markets.” Journal of International Money and Finance 27: 654–675.
Chisik, Richard. 2012. “Trade Disputes, Quality Choice, and Economic Integration.” Journal of International Economics 88: 47–61.
Choe, Jinill. 2001. “An Impact of Economic Integration through Trade: On Business Cycles for 10 East Asian Countries.” Journal of Asian Economics 12: 569–586.
Constantine, Costas. 2017. “Economic Structures, Institutions, and Economic Performance.” Journal of Economic Structures 6 (2). https://doi.org/10.1186/s40008-016-0064-0.
Destek, Mehmet A., and Arup Sinha. 2020. “Renewable, Non-Renewable Energy Consumption, Economic Growth, Trade Openness and Ecological Footprint: Evidence from OECD Countries.” Journal of Cleaner Production 242: 118537.
Devereux, Michael, and Bruce Lapham. 1994. “The Stability of Economic Integration and Endogenous Growth.” The Quarterly Journal of Economics 109 (1): 299–325.
Ejones, Felicia, Francis W. Agbola, and Adeel Mahmood. 2021. “Regional Integration and Economic Growth: New Empirical Evidence from the East African Community.” The International Trade Journal. https://doi.org/10.1080/08853908.2021.1880990.
Fetahi-Vehapi, Mahir, Lejla Sadiku, and Masoud Petkovski. 2015. “Empirical Analysis of the Effects of Trade Openness on Economic Growth: Evidence for South East European Countries.” Procedia Economics and Finance 19: 17–26.
Fukuda, Koji. 2018. “Trade Integration and Regional Income Disparities in a Growth Model with the Service Sector and Footloose Capital.” Applied Economics Letters. https://doi.org/10.1080/13504851.2018.1489500.
Gammadigbe, Vivienne. 2021. “Trade Integration in West Africa: Does the Quality of Institutions Matter?” Journal of African Trade 8 (1): 65–81. https://doi.org/10.2991/jat.k.211201.001.
Gujarati, Damodar N., Dawn C. Porter, and Supriya Pal. 2019. Basic Econometrics. 6th ed. New York: McGraw-Hill/Irwin.
He, Qinghua, Jialiang Liu, Chenggang Xue, and Shiming Zhou. 2019. “Bureaucratic Integration and Synchronization of Regional Economic Growth: Evidence from China.” China Economic Review. https://doi.org/10.1016/j.chieco.2019.101310.
Huchet-Bourdon, Marie, Luc Mouel, and Mireia Vijil. 2017. “The Relationship Between Trade Openness and Economic Growth: New Insights on the Openness Measurement Issue.” The World Economy (2017): 1–18. https://doi.org/10.1111/twec.12586.
Karam, Farah, and Caroline Zaki. 2015. “Trade Volume and Economic Growth in the MENA Region: Goods or Services?” Economic Modelling 45: 22–37.
Ketteni, Evangelia, and Chryssi Kottaridi. 2019. “Credit Market Deregulation and Economic Growth: Further Insights Using a Marginal Integration Approach.” Journal of Macroeconomics xxx: xxx–xxx.
Khan, Ibrahim, Fei Hou, Abdulrahman Zakari, and Victor K. Tawiah. 2021. “The Dynamic Links Among Energy Transitions, Energy Consumption, and Sustainable Economic Growth: A Novel Framework for IEA Countries.” Energy 222: 119935. https://doi.org/10.1016/j.energy.2021.119935.
Kong, Qiuyun, Dong Peng, Ying Ni, Xiaofeng Jiang, and Zhen Wang. 2020. “Trade Openness and Economic Growth Quality of China: Empirical Analysis Using ARDL Model.” Finance Research Letters. https://doi.org/10.1016/j.frl.2020.101488.
Langenhove, Luk, and Philippe Lombaerde. 2007. “Review Essay: Regional Integration, Poverty and Social Policy.” Global Social Policy 7 (3): 379–385. https://doi.org/10.1177/1468018107082240.
Lipsey, Robert G. 1957. “The Theory of Customs Unions: Trade Diversion and Welfare.” Economica 24: 40–46. https://doi.org/10.2307/2551626.
Lucas, Robert E. 1988. “On the Mechanics of Economic Development.” Journal of Monetary Economics 22 (1): 3–42. https://doi.org/10.1016/0304-3932(88)90168-7.
Ma, Shaojun. 2022. “Growth Effects of Economic Integration: New Evidence from the Belt and Road Initiative.” Economic Analysis and Policy 73: 753–767.
Manwa, Fred, and Asitha Wijeweera. 2016. “Trade Liberalization and Economic Growth Link: The Case of Southern African Customs Union Countries.” Economic Analysis and Policy. https://doi.org/10.1016/j.eap.2016.05.001.
Meade, James E. 1955. The Theory of Customs Unions. Amsterdam: North-Holland.
Menyah, Kenneth, Selçuk Nazlıoğlu, and Yaw Wolde-Rufael. 2014. “Financial Development, Trade Openness and Economic Growth in African Countries: New Insights from a Panel Causality Approach.” Economic Modelling 37: 386–394.
Milner, Helen V. 1997. “Industries, Governments, and the Creation of Regional Trade Blocs.” In The Political Economy of Regionalism, edited by Edward D. Mansfield and Helen V. Milner, 77–106. New York: Columbia University Press.
Minniti, Antonella, and Carlo P. Parello. 2011. “Trade Integration and Regional Disparity in a Model of Scale-Invariant Growth.” Regional Science and Urban Economics 41: 20–31.
Mohamed, Hamid, Moktar B. Jebli, and Salma B. Youssef. 2019. “Renewable and Fossil Energy, Terrorism, Economic Growth, and Trade: Evidence from France.” Renewable Energy 139: 459–467.
Murshed, Mohammad. 2021. “Can Regional Trade Integration Facilitate Renewable Energy Transition to Ensure Energy Sustainability in South Asia?” Energy Reports 7: 808–821.
Neary, J. Peter. 1999. “International Trade: Economic Integration.” In Trade Policy and Economic Growth: A Skeptic’s Guide to the Cross-National Evidence, Discussion Paper No. 2143, edited by Dani Rodrik, 1–40. London: CEPR.
Nepal, Rajib, Niraj Paija, Bhaskar Tyagi, and Chris Harvie. 2021. “Framework of an „Environmental Kuznets Curve‟ Hypothesis.” Journal of Environmental Management 281: 111886.
Nguyen, Cuong P., and Thuy D. Su. 2021. “Economic Integration and Economic Complexity: The Role of Basic Resources in Absorptive Capability in 40 Selected Developing Countries.” Economic Analysis and Policy 71: 609–625.
Oloyede, Bukola M., Eghosa S. Osabuohien, and Joseph O. Ejemeyovwi. 2021. “Trade Openness and Economic Growth in Africa‟s Regional Economic Communities: Empirical Evidence from ECOWAS and SADC.” Heliyon 7 (1): e06996. https://doi.org/10.1016/j.heliyon.2021.e06996.
Park, Seung-Hun, and Jae-Suk Yang. 2021. “Relationships Between Capital Flow and Economic Growth: A Network Analysis.” Journal of International Financial Markets, Institutions and Money 72: 101345.
Piton, Stéphane. 2021. “Economic Integration and Unit Labour Costs.” European Economic Review 136: 103746. https://doi.org/10.1016/j.euroecorev.2021.103746.
Pradhana, Ramesh Prasad, Moin Baidur Arvin, James H. Hall, and Norman R. Norman. 2017. "ASEAN Economic Growth, Trade Openness and Banking-Sector Depth: The Nexus." EconomiA 18: 359–379.
Qadir, Sobia, and Yermek Dosmagambet. 2020. “CAREC Energy Corridor: Opportunities, Challenges, and Impact of Regional Energy Trade Integration on Carbon Emissions and Energy Access.” Energy Policy 147: 111427.
Rafindadi, Abdulkadir A., and İsmail Öztürk. 2016. “Effects of Financial Development, Economic Growth and Trade on Electricity Consumption: Evidence from Post-Fukushima Japan.” Renewable and Sustainable Energy Reviews 54: 1073–1084.
Rahman, Md. Mahbubur, and Khaled Alam. 2019. “Exploring the Driving Factors of Economic Growth in the World‟s Largest Economies.” Heliyon 7: e07109.
Rahman, Md. Mahbubur, and S. A. K. Mamun. 2016. “Energy Use, International Trade and Economic Growth Nexus in Australia: New Evidence from an Extended Growth Model.” Renewable and Sustainable Energy Reviews 64: 806–816.
Rahman, Md. Mahbubur, Karim Saidi, and Mohamed B. Mbarek. 2020. “Economic Growth in South Asia: The Role of CO₂ Emissions, Population Density and Trade Openness.” Heliyon 6: e03903.
Rivera-Batiz, Luis, and Paul Romer. 1991. “Economic Integration and Endogenous Growth.” The Quarterly Journal of Economics 106 (2): 531–555.
Rodriguez, Francisco, and Dani Rodrik. 1999. “Trade Policy and Economic Growth: A Skeptic‟s Guide to the Cross-National Evidence.” Discussion Paper No. 2143, CEPR, London.
Rodríguez-Pose, Andrés, and Anastasia Sotiriou. 2019. “Trading with Richer and Poorer Countries: Trade Integration and Regional Inequality in Greece.” The Annals of Regional Science. https://doi.org/10.1007/s00168-021-01062-1.
Romer, Paul M. 1986. “Increasing Returns and Long-Run Growth.” Journal of Political Economy 94: 1002–1037.
Seck, Amadou, Fallou A. A., and Karim Aidara. 2020. “Regional Integration and Growth Spillovers: Is Africa an Economic Space?” Journal of African Trade 7 (1–2): 37–44.
Simola, Anna, Oliver Boysen, Emilio Ferrari, Valentin Nechifor, and Pierre Boulanger. 2022. “Economic Integration and Food Security: The Case of the AfCFTA.” Global Food Security 35: 100651. https://doi.org/10.1016/j.gfs.2022.100651.
Sokolov-Mladenović, Srđan, Mladen Milovančević, Miloš Mladenović, and Igor Mladenović. 2016. “Economic Growth Forecasting by Artificial Neural Network with Extreme Learning Machine Based on Trade, Import and Export Parameter.” Computers in Human Behavior 65: 43–45.
Song, Yu, Rui Huang, S. R. Paramati, and Abdulrazak Zakari. 2020. “Does Economic Integration Lead to Financial Market Integration in the Asian Region?” Economic Analysis and Policy. https://doi.org/10.1016/j.eap.2020.12.003.
Tinta, Abena A., David B. Sarpong, Isidore M. Ouedraogo, Rashid Al-Hassan, Aaron Mensah-Bonsu, and Esther E. Onumah. 2018. “The Effect of Integration, Global Value Chains and International Trade on Economic Growth and Food Security in ECOWAS.” Cogent Food and Agriculture 4 (1): 1465327. https://doi.org/10.1080/23311932.2018.1465327.
Tran, Ngoc V., Mohammed Alauddin, and Quang V. Tran. 2019. “Labour Quality and Benefits Reaped from Global Economic Integration: An Application of Dynamic Panel SGMM Estimators.” Economic Analysis and Policy 63: 92–106.
Usman, Khalid, and Umar Bashir. 2022. “The Causal Nexus Between Imports and Economic Growth in China, India and G7 Countries: Granger Causality Analysis in the Frequency Domain.” Heliyon 8 (2022): e10180.
Were, Mercy. 2015. “Differential Effects of Trade on Economic Growth and Investment: A Cross-Country Empirical Investigation.” Journal of African Trade 2: 71–85.
Yuliati, Lestari, Putu P. Atmaja, and Endah K. Lestari. 2020. “Trade Integration of Indonesia and Turkey‟s Non-Oil Sector.” Journal of Economics and Policy 13 (1): 149–169.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Zbornik radova Ekonomskog fakulteta u Istočnom Sarajevu
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
