Effect of International Trade and Regional Integration on Economic Growth: New Evidence from Africa

The need to re-engineer growth in Africa has become increasingly glaring in the face of the prevailing economic shocks that exposed their inadequate productivity power for basic and vital food and drugs. According to the World Bank and several other international agencies, the potential for international trade, especially regional integration remains huge. Theoretical literature supports this assertion, but the contradictory results from empirical studies necessitate employing robust techniques to reassess this relationship, especially as Africa engages in an all-continent regional agreement. This motivates the paper to assess the separate and joint effects of regional integration and international trade on economic growth. The study employed the System General Method of Moments GMM dynamic panel model for 40 selected countries across Africa. The findings show that in the context of increasing labour force, Foreign Direct Investment, government effectiveness and decreasing inflation, real interest rate and government debt, as well as regional integration and international trade, jointly and separately impact positively and significantly on economic growth. These results provide empirical justification for a continuous push for regional integration in Africa for the attainment of economic growth in Africa.