https://doi.org/10.52131/pjhss.2020.0802.0104
69
eISSN: 2415-007X
Pakistan Journal of Humanities and Social Sciences
Volume 8, Number 2, 2020, Pages 69 - 78
Journal Homepage: https://journals.internationalrasd.org/index.php/pjhss
Determinants of Intra Sub-Saharan African Trade: Evidence from
ECOWAS and CEN-SAD Countries
F.G Olaifa
1
, S.O Jimoh
2
1
Department of Economics and Development Studies, Kwara State University, Malete, Nigeria
Email: felix.olaifa@kwasu.edu.ng
2
Department of Economics and Development Studies, Kwara State University, Malete, Nigeria
Email: sodiqjimoh7@gmail.com
ARTICLE INFO ABSTRACT
Article History:
Received: Nov 03, 2020
Revised: Dec 14, 2020
Accepted: Dec 18, 2020
Available Online: Dec 31, 2020
This study investigates the determinants of intra-regional trade in
the Economic of West African States (ECOWAS) and the
Community of Sahel-Saharan Sates (CEN-SAD) over the period of
1995-2018.The study employs the modified Poisson models, which
captures the source of zero counts. Data on the real exchange rate,
population, and gross domestic product were sourced from World
Bank Development Indicators. Import flow, time of import, and
time of export were computed from WITS (COMTRADE). Further,
the study obtained data on voice and account, law and order,
government effect, regulatory quality, reduction in political
violence, control of corruption from World Wide Governance
indicator. The results of the study indicated that imports within
ECOWAS are driven by one governance variable or the other either
in the importing countries or the partner countries. Besides, trade
facilitation is a binding constraint to imports, while population and
GDP are important drivers of intra-ECOWAS trade. For CEN-SAD, it
is evident that the gravity variables are responsible for imports,
whereas governance variables have no significant effect on
imports. The implication of these results is that authorities in
ECOWAS and CEN-SAD should strengthen governance institutions
as doing so will boost trade within the region. Also, it is necessary
for government, particularly in CEN-SAD, to come up with policies
that will allow for accountability and transparency.
Keywords:
International Trade; Governance
variables; Poisson models;
ECOWAS and CEN-SAD
JEL Classification Codes:
F16, F140, C3, C4, F20
© 2020 The Authors, Published by iRASD. This is an Open Access Article
under the Creative Common Attribution Non-Commercial 4.0
Corresponding Author’s Email: felix.olaifa@kwasu.edu.ng
1. Introduction
International trade plays a pertinent role in any economy, and the volume of trade
between two or more countries goes a long way in determining the strength of the relationship
between the trading partners. According to UNCTAD and UN (2014), higher trading activities
induce economic growth and helps nations to achieve development goals such as poverty
reduction, employment, and environmental sustainability. This is because trade leads to the
inflow of finance, technology, and services needed to improve productive capacity in
agriculture, industry, and service sectors. The growth and the development effect of trade are
evident in East Asia and South-East Asia where economic growth was attributed to the ability
East Asia and South-East Asia to strengthen competitive productivity and increase the export
level in the agricultural and textile sectors (UNCTAD and UN, 2014). Trade has a bearing on
the job creation and standard of living of the populace. The channel through which trade leads
to job creation is strongly linked to productivity growth. According to UNCTAD and UN (2013),
higher trading activities provide nations the opportunity to access foreign technology and
foreign direct investment needed to enhance productivity. The increase in the level of
productivity strengthens the competitiveness of the trading nations. Competition promotes
innovative solutions, which in turns leads to the production of more goods and services,
enhance the exports capacities of the country, and generate employment opportunities. As