Financial Reform And Trade Liberalisation In Sub-Saharan African Countries: Which Is The Leading Indicator?
- Frank I. Ogbeide
- Oluwafemi M. Adeboje and Festus O. Egwaikhide
- ( paper pages. 85 - 118 )
This paper examined
the causal relationship between trade openness, financial reform and economic
growth in 17 African countries for the 2000-2018 period. The panel vector error
correction model was used to explain the direction of causality among the
variables while the panel fully modified OLS (FMOLS) method was used to
investigate the long-run elasticities among the policy variables. The study
found unidirectional causality from economic growth to trade openness in the
pooled Africa sample and East Africa, while feedback causality was observed for
West Africa, North Africa and South Africa. Unidirectional causality was seen
to exist from financial reform to economic growth in Africa while bidirectional
causality was found for the Southern Africa region. The study found bidirectional
causality between financial reform and trade openness in West Africa and
unidirectional causality from trade openness to financial reform in East Africa
and South Africa. Panel FMOLS estimates indicate a positive impact of financial
reform and trade openness on economic growth in the pooled Africa sample. The results
obtained show that trade liberalization policy led financial reform policy in 3
out of the 4 African regions studied, suggesting directional sequence between
both policy thrust in the process of attaining economic growth.
Frank I. Ogbeide, Oluwafemi M. Adeboje and Festus O. Egwaikhide.
"Financial Reform And Trade Liberalisation In Sub-Saharan African Countries: Which Is The Leading Indicator?"
The Nigerian Journal of Economic and Social Studies,
64 (1): 85 - 118.
E61, F13, F15, N37