Economic Integration and Economic Growth in ECOWAS Nations

The study explored the relationship between economic integration and economic growth in ECOWAS from 1986 to 2023. It utilized panel ARDL techniques, employing Pooled Mean Group (PMG) and Mean Group (MG) estimators, along with the Dumitrescu & Hurlin Granger non-causality test. The findings revealed that economic integration positively correlates with economic growth in both the short and long term, although significance is only evident in the long run. In contrast, trade integration showed a positive but insignificant relationship with economic growth across both timeframes, while financial integration exhibited a negative and insignificant relationship with growth in both the short and long term. The causality test indicated that economic integration has a one-way causation toward economic growth; there are bidirectional causal links between trade integration and economic integration; a two-way causation exists between financial integration and economic integration; and there is a one-way causal relationship from trade integration to financial integration. Based on these findings, the study recommends that policymakers in ECOWAS prioritize the deepening and sustaining of economic integration initiatives, with a focus on enhancing regional cooperation in infrastructure, trade policies, and regulatory frameworks to achieve long-term growth benefits. To strengthen trade integration, ECOWAS countries should invest in export capacity, reduce bureaucratic hurdles, and support competitive industries while implementing trade facilitation and capacity- building programs. The negative impact of financial integration on growth underscores the need to bolster financial systems by improving regulatory oversight, advancing capital market development, and promoting financial stability through robust institutional frameworks. Moreover, it is essential to establish stronger regional institutions to monitor financial and trade flows and provide technical support for effectively managing and harmonizing integration processes.