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An Empirical Analysis of Africa Continental Free Trade Area Economic Growth Prospects in the SADC Region: Evidence Using Autoregressive Distributed Lag-PMG Estimation Techniques

Authors: Ngonidzashe Chiranga; Teboho J. Mosikari; Mulatu F. Zerihun;

An Empirical Analysis of Africa Continental Free Trade Area Economic Growth Prospects in the SADC Region: Evidence Using Autoregressive Distributed Lag-PMG Estimation Techniques

Abstract

Inter-SADC trade relations of indebted small countries and their potential of ushering economic growth from AfCFTA are unclear in both the short and long run. The study aims to empirically examine if there are AfCFTA economic growth prospects for SADC nations in the short and long term through an examination of the trade openness-economic growth nexus, and how the external debt impacts economic growth. A panel of eight SADC countries is used from a period spanning 1996-2022. The study employs Autoregressive Distributed Lag (ARDL) and the Pooled Mean Group (PMG) estimation techniques. The findings suggest that trade openness impacts economic growth positively at the 1% level in the long run, whereas external debt impacts economic growth negatively at the 1% level in both the long and short run. The study also finds that causality runs from economic growth to trade openness and is unidirectional. SADC nations are urged to minimise the overreliance on external debt in the funding of domestic consumption needs as it has negative consequences on economic growth in the long term.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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