Globalisation and growth nexus: Evidence from Africa through Granger Causality and Wavelet Coherence

Abstract

This study analyses the causal relationship between economic growth with globalisation and its economic, social and political facets in 33 African nations, for 51 years from 1971 to 2021. On an empirical perspective, the Granger Causality Test is utilised in the cross-country analysis, with the Wavelet Coherence methodology being conducted to comprehend the growth-globalisation nexus for the African region. Conceptually, the study is based on the Endogenous Growth and Dependency theories in identifying how globalisation drives growth in Africa. Unidirectional causal flows between globalisation and growth have been revealed for Benin, Burundi, Cameroon, Côte d’Ivoire, Kenya, Mauritania, Seychelles, Sierra Leone, and Uganda. Bidirectional causal flows between globalisation and growth have been revealed for Eswatini, Egypt and Rwanda. The study also suggests the strengthening of economic, social and political integrations, leveraging natural resources for sustainable growth, and cultivating resilience against external shocks while extending targeted support for low-performing nations in the region as strategies to improve the globalisation-growth nexus in the region. The study contributes to the existing literature by providing a holistic assessment of the growth-globalisation dynamics in Africa and its regional nations, extending over five decades, and using a dual-method approach.

Keywords

• Economic growth
• Globalisation
• Economic globalisation
• Social globalisation
• Political globalisation
• Africa