The impact of good governance quality on trade openness in reformed african countries

This study assessed the impact of governance quality using World Governance Indicators (WGIs) on Trade Openness in reformed African countries. The study used secondary data covering 2005 to 2024 from 11 African countries which is obtained from World Development Indicators. The study employed trend analysis, descriptive, and Fixed Effects Panel estimation technique. Trade openness and import to GDP ratios have different trends among African countries. Mali and Senegal show consistently increasing trends of trade openness and import to GDP ratios. Ethiopia shows decreasing trends in both of trade openness and imports to GDP ratios. The trends of governance quality and internet adoption decline while urbanization increases. The result of the econometric analysis indicate that government quality, internet adoption and GDP growth rate and exchange rate are significant and positive determinants of trade openness in reformed African countries. At the same time, governance quality, internet adoption, and GDP growth have a positive and significant effect on the import-to-GDP ratio, but inflation has a significant and negative effect on import-to-GDP ratio. In both cases, quality of governance has positive and significant impact. Accordingly, strong institutions and GDP growth are necessary to improve trade openness.