The macroeconomic and institutional determinants of economic growth in African regional blocs: a panel data analysis

doi:10.26565/2786-4995-2025-4-12

Emmanuel Imuede Oyasor Walter Sisulu University, Mthatha https://orcid.org/0009-0005-7500-5919

DOI: https://doi.org/10.26565/2786-4995-2025-4-12

Keywords: economic growth, investment flow, endogenous, panel data, institutional theory

Abstract

Economic growth remains a fundamental benchmark for assessing the transformation of economies across the developed, emerging, and developing world. In the African context, regional economic communities (RECs) such as ECOWAS, SADC, COMESA, and EAC represent strategic platforms where growth can enhance per capita income, employment creation, foreign investment, and welfare.

Problem statement. Despite this potential, African economies continue to face growth-limiting challenges. Macroeconomic instability, weak institutional performance, demographic pressures, and structural vulnerabilities persistently hinder inclusive and sustainable development.

Unresolved aspects of the problem. While existing studies examine growth determinants in Africa, many are constrained by short time horizons, single-country focus, or narrow sets of variables. Consequently, limited attention has been given to the long-term interplay of demographic, institutional, and macroeconomic factors across diverse regional blocs, leaving critical policy gaps unresolved.

Purpose of the article. This study aims to investigate the macroeconomic and institutional drivers of growth in African regional blocs from 1960–2022. By applying the STIRPAT framework, it evaluates how population dynamics, inflation, labor force, broad money, and military expenditure influence GDP growth, while accounting for structural shifts, policy reforms, and external shocks.

Presentation of the main material. Using a balanced panel of 48 African countries, the analysis employs fixed effects, random effects, and first-differenced models to address endogeneity and heterogeneity. Results show that labor force expansion strongly supports growth, while population growth exerts a marginally negative effect. Inflation and broad money display weak direct impacts. The fixed effects model best captures within-country variations, underscoring the importance of country-specific characteristics in shaping growth outcomes.

Conclusions. The findings suggest that African countries should leverage their demographic dividend, strengthen institutional frameworks, and foster regional integration to achieve sustainable and inclusive growth. By covering six decades and multiple blocs, the study offers original insights for policymakers and development partners, providing a broader evidence base for growth-oriented strategies in Africa.

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Author Biography

Emmanuel Imuede Oyasor, Walter Sisulu University, Mthatha

Research Fellow

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