Preferential trade agreements and quality of government in Sub-Saharan Africa

Objectives. Sub-Saharan African (SSA) nations have made concerted attempts at economic integration and openness with use of preferential trade agreements (PTAs) beginning in the latter half of the 1990s. These changes could result in increases in trade and growth. The World Bank's Good Governance indicators are designed to assess the quality of institutions in a given country. The objective is to assess the impact of PTAs and Good Governance indicators on trade in SSA nations. Methods. Data on trade was generated based on exports defined by the International Monetary Fund's (IMF) Direction of Trade statistics, and both OLS and Tobit regression analysis was conducted to assess the impact of PTAs and Good Governance compared on growth. Results. The data demonstrates that PTAs have a negative impact on trade and that good governance does positively influence trade. Conclusion. This study shows that PTAs are a deterrent to trade, which bears further analysis of how to encourage growth in SSA countries, and demonstrates that governance is an important factors in SSA trade. Further infrastructure development as recommended by the International Trade Centre (2012) may provide new opportunities for growth.