Financial Integration and the Growth of Selected Nations in ECOWAS
Abstract
This study investigated the impact of financial integration on the growth of selected nations in Economic Community of West African States (ECOWAS) between 2001 to 2024. The specific objectives of the study are to examine the effect of financial soundness, exchange rate and tariff on economic growth in ECOWAS. The study collected panel data from the World Bank, WTO and UNCTAD and used the fixed effect model to analysed the relationship between the independent variables and the dependent variable. Based on the fixed effect model, the findings showed that, export financial soundness was found to have positive and significantly effect on economic growth in ECOWAS. Also, exchange rate has positive and significant effect across ECOWAS member states. Nevertheless, tariff has negative and insignificant effect on economic growth in ECOWAS. In line with the results, the study concludes that, financial integration exerts a meaningful influence on economic growth in ECOWAS. Based on the findings, it was recommended that, there should be diversification of ECOWAS economy in terms of exports. Thus, financial integration should lead to better diversification of risks and makes a positive contribution to financial stability by improving the capacity of economies to absorb shocks.
Downloads
References
Alastaire, S.A. (2022). Regional integration in West Arican Economic and Monetary Union (WAEMU): Complementarity or competition? Economies, 10(1), 22
Amoro, G. (2020). Export diversification and economic growth for ECOWAS States, America Journal of Economics 10(6), 433-440,
Coulibaly, I., (2015). Optimality of a Monetary Union: New evidence from exchange rate misalignments in West Africa, Economic Modelling, 32(2), 463-482.
Dwivedi, D. N. (2006). Principles of economics. New Delhi: Vikas Publishing House PVT.
Ehigiamusoe, K. U., & Lean, H. H. (2019). Do economic and financial integration stimulate economic growth? A critical survey. Economics: The Open-Access, Open-Assessment E-Journal, 13(4), 1-27.
Frankel, J. A. (1997). Regional trading blocs in the world economic system. Peterson Institute for International Economics.
Hlalefang, K., Nwabisa, K. & Clement, M. (2017). The long run relationship between trade integration and economic growth in Ghana and Nigeria covering the period between 1980 and 2016, MPRA Munich Personal RePEC Archive.
IMF (2020). International Monetary Fund Direction of Trade Statistics, 2020
Emmanuel, A. O. (2018). Financial integration in the West African Monetary Zone (WAMZ): Towards a single insurance market, CBN Bullion, 42(4), 3-11.
Gehringer, A. (2015). Uneven effects of financial liberalization on productivity growth in the EU: Evidence from a dynamic panel investigation, International Journal of Production Economics, 159: 334–346.
Ibrahim, S., Mazlina A. R., Azman–Saini W.N.W. & Zakaria, M. F. M. (2016). Financial integration growth nexus: A quantile regression analysis, Journal of Economic Integration, 31(3), 531–546.
Kao, C., (2019). Spurious regression and residual-based tests for regression in panel data. Journal of Economics, 12(90), 31-44.
Klofat, A. (2017). Corporate tax rates and regional integration: Evidence from transition countries, Journal of Economic Integration, 32(1), 1–34.
Mohan, R. (2005). Globalization, financial markets and the operation of monetary policy in India, BIS Papers. No. 23.
Nwosu, E. J. (2013). The challenge of poverty in Africa, Owerri: Skill Mark Media Ltd
Olunkwa, N.C., Nnoruga, O.M., Iwegbu, O. & Nwokoma, N.I. (2024). Comparative economic performance in selected ECOWAS countries, ResearchGate-Centre for Economic Policy Analysis and Research, 60-87
Romer, P. (2011). Endogenous technological change. Journal of Political Economy, 9(8), 71– 102.
Sanusi, T.S. & Hammajumba, M. (2022). Regional integration: An assessment of Economic Community of West African States ECOWAS and Southern African Development Community (SADC), Economics and Social Sciences Academic Journal, 4(9), 19-27
Umaru, H., Aguda, N.A. & Nordiana, O.D. (2018). The effects of exchange rate volatility on economic growth of West African English-speaking countries, International Journal of Academic Research in Accounting, Finance and Management Sciences, 8(4), 131-143.
United Nations Economic Commission for Africa (2021). Economic report on Africa.
UNCTAD (2023). Trade and Development Report 2023.
USAID.1998. The fiscal year accountability Report. Pp.129.
The authors and co-authors warrant that the article is their original work, does not infringe any copyright, and has not been published elsewhere. By submitting the article to GPH-International Journal of Social Science and Humanities Research, the authors agree that the journal has the right to retract or remove the article in case of proven ethical misconduct.
