Browsing by Author "Victoria Olutofunmi OGUNDAIRO"

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    Trade Openness, Financial Sector Development, and Economic Growth in South Africa, Algeria, Nigeria, and Egypt
    (Lead City University, Ibadan, 2025-12) Victoria Olutofunmi OGUNDAIRO
    South Africa, Algeria, Nigeria, and Egypt (SANE) struggle with overreliance on volatile commodity exports, like oil and gas in Nigeria and Algeria, leading to boom-bust cycles and limited industrial diversification. Underdeveloped financial sectors, shallow capital markets, and poor credit access constrain investment in innovation and SMEs, hindering economic growth despite South Africa’s relatively advanced banking system. Also, structural issues, including South Africa’s deindustrialization and Egypt’s stagnant low-tech manufacturing, combined with weak domestic policies, reduce resilience to external shocks and undermine sustainable economic growth and long-term productivity. The ARDL estimator was used after verifying stationarity at levels and first differences and cointegration validation. Findings show that, in the short run, financial sector development contributes positively to trade openness in Egypt and Nigeria, while it hinders trade openness in Algeria. In the long run, financial sector development promotes trade openness in Algeria and Egypt, but its influence is not statistically significant in Nigeria and South Africa. The long-run effect is particularly positive in Algeria and Egypt, though certain components such as domestic credit to the private sector may exert a dampening effect. Conversely, broad indicators of financial development enhance trade openness in Egypt but appear to constrain it in Algeria. Regarding economic growth, financial sector development improves short-run growth in South Africa but hinders it in Algeria and Egypt. In the long run, it supports growth in Algeria and South Africa, while its effect in Egypt remains negative. The growth-enhancing role of financial sector development in Algeria is particularly evident over time. Trade openness fosters growth in South Africa in both the short and long term but harms short-run growth in Nigeria and Egypt. It promotes long-run growth in Algeria. The interaction between trade openness and financial development generally benefits growth especially in Algeria but has mixed effects elsewhere, including a short-run negative impact in Nigeria and a long-run negative effect in South Africa. Government should expand access to domestic credit for the private sector and deepening stock markets, while implementing targeted trade policies that support industrial diversification and buffer short-run volatility to enhance economic growth in the region. Keywords: Domestic Credit to Private Sector, Broad Money Supply, Stock Market Capitalization, Trade Openness, Economic Growth. Word Count: 320