Abstract
It is observed that despite the legislative endorsement of the West Africa Countries there is still a glaring divergence in economic structures, which impedes the performance to realize macroeconomic convergence and economic growth within the region. This paper investigated the effects of trade and financial indexes in WAMZ on economic growth. The paper uses three variables and a host of control measures to focus on six countries of WAMZ covering the periods of 2001-2018. Given the heterogeneous nature of the information gathered for the study, the models are cast in static and dynamic panel frameworks that provided micro-structure for the combined data analysis. The models were tested with various econometric and statistical instruments. Results from the analysis show that exported trade is highly concentrated to fewer goods, while imported trade is concentrated on more products and partners; that is, countries in WAMZ tend to shadow liberal import policy. The weak link was also noticed among financial and trade indexes and economic growth in the WAMZ economies. The implications call for short term economic plans and policies in the WAMZ economies so as to collectively monitor economic policies and growth. We equally observed that the structures of the economies in the region are heterogeneous making it rather difficult for regional trade and financial indicators to accelerate output growth in the region. Thus our basic postulations are an inter-policy approach on social, political and economic (trade and finance) arrangements that would neutralize the heterogeneity and foster institutional and attitudinal reforms, eliminate insecurity challenges, and spur political stability and responsible leadership within the regions.
Highlights
The failure of the post-world war II institutions (Bretton Woods Institution) had heartened and invigorated many economies to seek for alternative institutions that support their economic and political structures
The coefficients of the individual unit account for great deal in the analysis of the six counties in the West African Monetary Zone (WAMZ)
The findings of this study indicated internal validity on the basis that strong financial sector of the WAMZ economies and the index of trade volume as the basic components of regional integration are sacrosanct to high volume of economic growth within the region
Summary
The failure of the post-world war II institutions (Bretton Woods Institution) had heartened and invigorated many economies to seek for alternative institutions that support their economic and political structures. The West African Monetary Zone (WAMZ) member states have since 2001, pursued a wide range of economic and financial reforms to settle some of the economic and institutional issues that impede all attempts to achieve trade integration, effective economic interdependence and financial integration. It is still uncertain how the different structural reforms chosen to enhance trade and financial integration could affect productivity growth in the WAMZ member states Given this mixed evidence on the regional integration-economic growth relationship, this paper uses another vista to ascertain the degree to which regional trade and financial measures pursued in WAMZ may have caused the enhancement of output growth. Because of the heterogeneous nature of the information gathered for the study, the paper make-do with cross-sectional and time series data to examine trade and financial integration impact on economic performances of the WAMZ economies. Aside from the introductory section, the paper is outlined such that we have issues in literature, data and method of analysis, results and discussions and the conclusion
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