TRADE AGREEMENT GLOBAL VALUE CHAIN AND ECONOMIC DEVELOPMENT IN WEST AFRICA MONETARY ZONE: AN EMPIRICAL ASSESSMENT

Abstract

This study examined the trade agreement global value chain and economic development In West Africa Monetary Zone. The primary aim of this study is to examine the impact of trade agreement global value chain and economic development In West Africa Monetary Zone countries. The figures were sourced from the Central Bank of Nigeria and the figures Bulletin for the years as well as World Bank database1990 to 2022. The study used panel dynamic linear Auto regressive distributed lagged (PDARDL) regression to examine three explanatory variables: Preferential Trade Agreement depth/coverage (PTA), Global Value Chain participation index (GVC) and Terms of Trade (TOT). The dependent variable under consideration was Gross Domestic Product per Capita (proxy for economic development) GDPPC.) The findings revealed that The study found compelling evidence of significant positive relationships between preferential trade agreements, global value chain integration, and economic development in WAMZ countries. Specifically, a one-unit increase in PTA depth is associated with approximately 45.6% higher GDP per capita (p < 0.01), while a 1% increase in GVC participation leads to 0.234% higher economic development (p < 0.05). The total effect of PTAs on economic development, combining direct and indirect channels through GVC integration, reaches 58.9%, demonstrating the substantial development potential of deeper trade integration. It was concluded that study concludes with evidence that preferential trade agreements can serve as effective instruments for promoting economic development in the West African monetary zone through enhanced global value chain integration.