The Impact of Trade Openness on Economic Growth: Case of 36 Sub-Saharan African Countries (1995-2017)

Abstract

Many researchers claim that there is direct relationship between trade openness and economic growth in sub Saharan Africa, and that Africa has a long way to go to improve their trade in order to reach in the international market level. Others argue that there is a long term positive impact of trade on economic growth or there is no relationship between trade and economic growth in subSaharan Africa. Therefore, this research studies impact of trade openness on economic growth of the 36 subSaharan African countries, measuring the impact of trade openness on the Economic Growth. The study uses annual data from both the World Bank and Heritage Foundation databases for the panel based countries over the period 1995-2017. I explore one hypotheses that trade can enhance growth in these countries based on several key factors such as availability of economic freedom, and the good governance system. I test this hypothesis using panel data series for trade. I further consider population Growth, good governance, trade barriers and the government consumption as the most important contributing variables through this study.