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Volume 2, Issue 1 - July 2026

Trade in Natural Resources, Institutional Quality and Economic Growth in Sub-Saharan Africa.

Paper ID: CRSIJ26000338

Author(s): Freeman Aye-Agele, Ugor Peter A.

Category: Arts, Social Sciences and Humanities

Research Area: Economics

Pages: 671-689

Published Date: 03-09-2026

Volume/Issue: Volume 2 Issue 1 July-2026

ISSN (Online): 3108-1584

Abstract

This study seeks to analyse the impact of trade diversification and institutional quality on economic growth in Sub-Sahara African Countries using the dynamic panel system generalized method of moments (Sys-GMM). The study employed annual panel data comprising 48 Sub-Sahara African Countries ranging from 2003 to 2024. The model has the economic growth measured by GDP growth rate (GDPR) as the dependent variable while trade in natural resources (TNRS) and institutional quality (INSQ) are the independent variables of interest. The control variables from the model are population growth rate (PGR), logistics performance (LOGIS), labour (LAB) and capital (K). The results revealed that, trade in natural resources is positive but statistically insignificant on economic growth in Sub-Saharan Africa within the period under study. The implication is that trade in natural resources has an increasing effect on one economic growth in SSA. On the other hand, institutional quality established a positive impact on economic growth though the impact is insignificant. This implies that SSA countries still have weak institution as evident in poor governance, uncontrolled corruption and weak regulatory quality. For the control variables, the coefficient of labour had a positive impact on economic growth but the coefficients of population growth rate, logistic performance and capital were found to be negatively impacting on economic growth. Only labour showed a significant effect while population growth rate, logistic performance and capital were insignificant. The empirical implication is that SSA still have weak institution, rapid growing population with little contribution to economic growth and weak logistic performance. Finally the negative effect of capital signifies the cost of borrowing money for business and investment in SSA counties are too high to bring about significant contribution to economic growth.

Keywords

Trade in Natural Resources, Institutional Quality, Economic Growth, Sub-Sahara African Dynamic Panel Sys-GMM

Citations

Freeman Aye-Agele, Ugor Peter A., "Trade in Natural Resources, Institutional Quality and Economic Growth in Sub-Saharan Africa.", Cosmo Research & Science International Journal, vol. Jul-25, no. 1, pp. 671-689, 2026.

Freeman Aye-Agele, Ugor Peter A. (2026). Trade in Natural Resources, Institutional Quality and Economic Growth in Sub-Saharan Africa.. Cosmo Research & Science International Journal, Jul-25(1), 671-689.

Freeman Aye-Agele, Ugor Peter A.. "Trade in Natural Resources, Institutional Quality and Economic Growth in Sub-Saharan Africa.." Cosmo Research & Science International Journal, vol. Jul-25, no. 1, 2026, pp. 671-689.

BibTeX
                @article{CRSIJ26000338,
                  author = {Freeman Aye-Agele, Ugor Peter A.},
                  title = {Trade in Natural Resources, Institutional Quality and Economic Growth in Sub-Saharan Africa.},
                  journal = {Cosmo Research and Science International Journal},
                  year = {2025},
                  volume = {2},
                  number = {1},
                  pages = {671-689},
                  issn = {3108-1584},
                  url = {https://cosmorsij.com/published/CRSIJ26000338.pdf},
                  abstract = {This study seeks to analyse the impact of trade diversification and institutional quality on economic growth in Sub-Sahara African Countries using the dynamic panel system generalized method of moments (Sys-GMM). The study employed annual panel data comprising 48 Sub-Sahara African Countries ranging from 2003 to 2024. The model has the economic growth measured by GDP growth rate (GDPR) as the dependent variable while trade in natural resources (TNRS) and institutional quality (INSQ) are the independent variables of interest. The control variables from the model are population growth rate (PGR), logistics performance (LOGIS), labour (LAB) and capital (K). The results revealed that, trade in natural resources is positive but statistically insignificant on economic growth in Sub-Saharan Africa within the period under study. The implication is that trade in natural resources has an increasing effect on one economic growth in SSA. On the other hand, institutional quality established a positive impact on economic growth though the impact is insignificant. This implies that SSA countries still have weak institution as evident in poor governance, uncontrolled corruption and weak regulatory quality. For the control variables, the coefficient of labour had a positive impact on economic growth but the coefficients of population growth rate, logistic performance and capital were found to be negatively impacting on economic growth. Only labour showed a significant effect while population growth rate, logistic performance and capital were insignificant. The empirical implication is that SSA still have weak institution, rapid growing population with little contribution to economic growth and weak logistic performance. Finally the negative effect of capital signifies the cost of borrowing money for business and investment in SSA counties are too high to bring about significant contribution to economic growth.},
                  keywords = {Trade in Natural Resources, Institutional Quality, Economic Growth, Sub-Sahara African Dynamic Panel Sys-GMM},
                  month = {July}
        }      

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