Regional Trade and Economic Development in Sub-Sahara African Countries

This paper analyse the impact of regional trade on economic growth in Sub-Sahara African (SSA) Countries using the dynamic panel system generalized methods of moments (System GMM). The study utilized annual panel data comprising 48 SSA Countries spanning from 2003 to 2024. The system GMM model has the GDPR proxied by GDP growth rate (GDPR) as the regressand variable while trade openness (TOP) and Africa trade share (ATS) as the independent variables. Other controlled variables introduced in the model are institutional quality (INSQ), population growth rate (PGR) Logistic performance (LOGIS) Labour (LAB) and Capital. The results revealed that TOP, INSQ, PGR, African trade share, Logistic performance, and LAB were found to positively impact on GDPR rate of SSA Countries within the period of 2003-2024. But the co-efficient of capital was found to be negatively impacting on GDPR of SSA countries. Despite trade openness, INSQ, PGR, ATS, logistic performance, and LAB having positive effect on GDPR rate, only TOP and LAB showed a substantial influence on GDPR, ATS, and LOGIS were insignificant. The empirical implication is that SSA countries still have weak institutions rapid growing population with little contribution to GDPR average trade share with the other nations contributing insignificantly to economic growth, and weak logistic performance. However, over the years, the TOP and productive LAB force have substantial impact on the GDPR of SSA countries owing to the increase of trade liberalization and educational revolution in SSA countries. Finally the negative effect of capital signifies the cost of borrowing money for business and investment in SSA Countries are too high and bring about significant contribution to GDPR.