Globalisation and Output Growth Nexus in Sub-Saharan Africa: the Critical Role of Trade Liberalisation

Countries in Sub-Sahara Africa (SSA) have recently increased their integration into the global economy through trade liberalisation to stimulate their developmental efforts. This is consequent on the findings from previous empirical studies that the SSA region has not benefited immensely from globalisation. Although several empirical studies have been done on the effect of globalisation on economic growth in Africa, they have largely ignored the role of trade liberalisation in the mix. Hence, using secondary data from 1990 to 2019, covering four of the most liberalised SSA nations, and applying the autoregressive distributed lag (ARDL) framework, the study analyses the effects of globalisation on economic growth in Nigeria, South Africa, Ghana, and Kenya via the trade liberalisation channel. Similar to previous findings, the result shows that globalisation, from the KOF Swiss Economic Institute, negatively and insignificantly impacts economic growth in Nigeria, South Africa, Kenya, and Ghana, while trade has a positive impact on growth in all the selected countries. However, we find that trade liberalisation augments globalisation to improve growth in the SSA countries. Lastly, we find various causal nexuses among the indicators for the SSA region and then recommend policies as well.