Bilateral Trade, Real Exchange Rate and Economic Growth Nexus in African Countries.

ABSTRACT :; The study investigated “Bilateral Trade, Real Exchange Rate and Economic Growth Nexus inAfrican Countries: Evidence from Nigeria’s border closure” using the Poisson Pseudo-MaximumLikelihood(PPML) of gravity model over the period of 2000 to 2020. Our findings on the exporter GDP, showsa positive relationship with the bilateral trade flows represented by exportat a statistically significant level. Thus,explaining trade flows among the countries is a positive function of the importer GDP. The Real EffectiveExchange Rate (REER) also has a positive relationship with bilateral trade flows among the countries. Sharing acommon border, one of the independent variables of this study, however, has a negative relationship withbilateral trade flows. This implies that sharing a common border with other countries is not a major determinantof trade relations with other countries. This result does not follow our a-priori,which expects border sharing tohave a positive impact on trade flows.

KEYWORDS:Bilateral Trade,Border sharing, Real Exchange Rate,Poisson Pseudo-Maximum-Likelihood(PPML)