Abstract:
The study assesses the impact of trade integration on the economic performance in ECOWAS. The focus was on a panel of fifteen ECOWAS countries from 1995 to 2022 with data from United Nations Conference Trade and Development. The Autoregressive Distributed Lag (ARDL) bound testing method was employed to determine the long-run and short-run relationships. In the short run, extra-trade (t = -5.12, Pr(0.05) = 0.0361) has a large negative impact on the economic performance while investment (t = 4.33, Pr(0.05) = 0.0494) has a large positive impact on economic performance. The long-run result shows that only the lagged economic performance (t = -6.24, Pr(0.05) = 0.0247) shows a significant large negative impact on the current economic performance while intra trade, extra trade, investment, labour force participation and inflation are not significant. The study concludes that while trade between members of ECOWAS (intra-trade) failed to stimulate economic performance of the trade bloc, trade of ECOWAS member countries with non-members of ECOWAS adversely affects economic performance of the trade bloc. The need for ECOWAS to diversify and comprehensively review the treaty to align them more effectively with the goal of promoting trade among member countries was recommended.
