Trade Liberalization and Economic Growth in Sub-Saharan African Countries

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.